S&P: France likely to lose AAA rating

Standard & Poor's last night warned it is likely to downgrade the sovereign debt credit ratings of France, Spain, Italy, Ireland and Portugal if the economic slowdown intensifies.

The ratings agency said if the region slips into recession and government borrowings soar further, all five countries will be downgraded by one or two notches, according to Reuters. The group added there is a not sufficient support mechanism in the place to re-capitalise European banks. However, the group added they expect the European Central Bank to intervene and prop up the banks, as failure to do so will inevitably push the continent into recession. "Ballooning budget deficits and bank re-capitalisation costs would likely send government borrowings significantly higher under b...