Germany Frets as France Declines

A Moody’s downgrade of French debt highlights France’s weakness

German Chancellor Angela Merkel welcomes French President Francois Hollande at the Chancellery in BerlinPhotograph by Sean Gallup/Getty Images

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By Carol Matlack and James Hertling and Leon Mangasarian

November 22, 2012 at 1:11 AM UTC

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This article is part of the November 26, 2012 issue of businessweek.

It was bad news for France—and possibly worse news for France’s neighbors. Late on Nov. 19, Moody’s Investors Service stripped Paris of its AAA bond rating. The move, though widely anticipated, raises the likelihood that other European economies could be hit with downgrades.