Moody's warns France and Britain

Moody's Investor's Service warned France Tuesday that its credit rating could be lowered if the debt problem spreading through Europe is not contained. The fear of the debt issue spreading further and deeper in the region has already resulted in repeated downgrades of credit scored across Europe. France, however, has the second largest economy in Europe after Germany and is clinging to a top-tier triple A rating, having been downgraded in January by ratings assessment firm Standard & Poor's. Moody's on Tuesday downgraded the ratings of six other European countries, including Italy and Spain, the EUobserver reported. In addition, the credit rating service shifted Britain's triple A status to negative, a sure indicator that its top-tier rating is in jeopardy. British Finance Minister George Osborne said the negative status was a "reality check," that indicated Britain must lower its budget deficit. "This is proof that, in the current global situation, Britain cannot waver from dealing with its debts," he said. France has already begun to take steps to reduce its deficit and remains "determined to press ahead with its actions to boost growth and competitiveness, notably the reform of the financing of welfare, of employment and the reduction of public deficits," finance minister Francois Baroin said in a statement. Spain already heard this week that S&P and the third big ratings firm Fitch's lowered ratings on four of the country's largest banks, including Santander, the largest bank by market capitalization in the 17-member eurozone. "The downgrade of Spain indicates a weakening of its ability to support its largest banks," Fitch said in a statement.