France faces the spectre of a downgrade of its AAA credit rating by not one but two notches after a heated EU summit considered a last chance to save the debt-struck eurozone.
The Standard and Poor's ratings agency warned France, Germany and 13 other eurozone members that they faced a possible downgrade amid worsening economic conditions and discord among the region's leadership.
While Germany is in the same dock, France distinguishes itself by being the only one of the six countries with the hallowed Triple-A rating that may see two notches knocked off.
The top rating allows governments to borrow at advantageous rates.
S&P said it would complete a review of the 15 countries' ratings "as soon as possible" following the European Union summit in Brussels Thursday and Friday.
"I have no doubt that France's rating will be lowered," said Charles Wyplosz, a professor of international economics at Geneva's Graduate Institute.
"Whether it happens tomorrow or in a month it won't make much of a difference. If I were Standard and Poor's, I would decide right away."
In reality, "France lost its Triple A a long time ago," he said.
"There will be debt restructuring, which won't be voluntary. Banks will collapse, including possibly a number of French banks that are very exposed to Greece, Portugal, Italy and Spain," Wyplosz added.
"The government will have to bail them out, and that's why Standard and Poor's, in my opinion, wants to lower the Triple A," he said.
But Elie Cohen of France's National Centre of Scientific Research said: "The news coming from this summit is not the sort of news that precipitates a downgrade."
He said a ratings agency would normally take time to scrutinise developments in a country once it is put under watch. The usual period is three months.
Asked Friday about this sword of Damocles over France, Budget Minister Valerie Pecresse expressed the hope that the Brussels agreement would be well received by "all eurozone watchers."
EU leaders on Friday agreed to back tighter budget policing, but failed to reach unanimity as Britain refused to get on board.
Wyplosz said that while the summit had taken "the first real step in the right direction, there is still too much uncertainty to be able to draw conclusions," and weeks of further negotiations can be expected.
A downgrade would reopen the question of new austerity measures after two belt-tightening plans unveiled by the French government since the summer, while growth forecasts dim.
The government is still predicting growth of 1.0 percent in 2012, while the OECD sharply lowered its forecast to 0.3 percent.
"We don't even have enough growth to service the interest on the public debt," lamented Marc Touati of Assya Compagnie Financiere. Faulting the summit for failing to take real steps to shore up growth in the eurozone, he joked: "What's the point of being cured, then dying?"
Wyplosz agreed, saying what was needed was twofold, involving "joining hands for the long term" to clean up public finances and "giving each other space in the short term in order to avoid recession."
He added: "You pay for decades of irresponsibility and the inability to deal with the banks correctly. You pay for everything in the end."