Loss of France's AAA-rating ‘would be more damaging' than US downgrade

The loss of France's AAA-rating would be a worse scenario for the global economy than the downgrade of the US, said Ignis chief economist Stuart Thomson.

The past few months have seen credit rating agencies Moody’s and Standard & Poor’s warning European sovereigns could face downgrades, but economists have been divided over whether these threats will become a reality. Thomson expects France to lose its AAA-status in the next six months, while Italy, Spain  and Belgium are likely to face downgrades within a year, he said. “France losing its AAA-status is more important than the US losing its AAA-status because of France’s role in the European Financial Stability Facility rescue fund, and a downgrade is inevitable based on its economic o...