Allister Heath
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Fears over France's credit rating

Borrowing costs in Europe have cheapened but governments are still rushing to prove that they are taking the debt problem seriously.

France's president Nicholas Sarkozy cut short his holiday to hold an emergency cabinet meeting.

There is speculation that the country could be the target of a downgrade by the credit rating agency S&P. However, both the company and the French finance minister have denied this.

Allister Heath is the Editor of City AM and told the BBC that Germany could also be at risk of a downgrade as Europe's debt is federalised.

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