S&P Downgrades France, Italy, 7 Others

Standard & Poor's has downgraded the government debt of France, Austria, Italy, and Spain by one notch, but maintained Germany's at the coveted 'AAA' level. The cuts, which eliminated France and Austria's triple-A status, deal a heavy blow to the currency union's ability to fight off a worsening debt crisis. In total, S&P cut its ratings on nine eurozone countries.

Italy was lowered by two notches to BBB+ from A, Spain fell to A from AA-, and Portugal and Cyprus also dropped two notches. The agency also cut ratings on Malta, Slovakia, and Slovenia. The downgrades come as crucial talks on cutting Greece's massive debt pile appeared close to collapse today. (More S&P stories.)