France has lost its AAA credit rating, along with several other European economies afflicted by ongoing concerns about the viability of the Eurozone at credit ratings agency Standard & Poor’s, leading to higher borrowing costs for servicing already burgeoning national debts.

France has become the latest casualty of the ongoing Eurozone crisis after credit rating agency Standard and Poor’s (S&P) downgraded the French AAA credit rating, leading to a rise in borrowing costs and the costs of servicing the national debt.

The decision will lead to more significant borrowing costs for the French government, servicing a large national debt which had already been seen as a source of potential weakness in the region. As a result, S&P was criticized by some commentators as aggravating the already bleak position in the region.

In addition to the French downgrade, eight other Eurozone counties including Austria, Spain, Italy and Portugal were subject to downgrading decisions, with Portuguese debt awarded a ‘junk’ rating in recognition of the significant levels of perceived default risk.

The S&P review gave a ‘negative outlook’ for those countries under review, excluding Slovakia and Germany which managed to survive unscathed. An S&P statement said the decisions reflected “insufficient” measures from Eurozone leaders to combat the current crisis and develop a framework for recovery.

The Eurozone is currently reeling from the effects of a regional sovereign debt bubble which has seen countries build unsustainable debts through running consistently high budget deficits. Ireland, Portugal, Italy and Greece have already been subject to external support from the Eurozone and others to prop up their economies and provide the much needed liquidity to meet spending obligations in a tighter borrowing climate.

While European leaders have met on several occasions to attempt to resolve the crisis, the markets and S&P at least remain unimpressed by efforts to iron out these fundamental economic problems.