The French finance minister Francois Baroin said the country would not allow the agencies to dictate its policies after the ratings agency Standard & Poors downgraded France's triple-A rating.

Gillian Tett, assistant editor of the Financial Times, says it's very embarrassing politically for France but its more important on a European level as it casts into question the eurozone stability fund.

Jim O'Neill, chairman of Goldman Sachs assets management, says it's not good news but it's been expected. He believes it puts more pressure on the monetary authorities. There is a worry of a "vicious circle", he adds, where the eurozone countries will struggle to get out of a situation where deficit gets bigger and growth weakens despite the efforts to "tighten".

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