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Paris. French President Nicolas Sarkozy got a small boost from Moody’s rating agency on Monday following a bruising downgrade last week of the way the country had been handling its economy.

Moody’s said on Monday that it was maintaining France with a top AAA rating and stable outlook for its debt. Rival agency Standard & Poor’s, more downbeat about the prospects for France and Europe as a whole, stripped France of its long-cherished triple-A rating on Friday.

In early trading, markets appeared to brush off S&P’s decision to cut the credit ratings of nine European nations, including France. Though the downgrades had been expected, they served as a reminder that the 17 countries that use the euro as their currency still have a long way to go to get a handle on the two-year debt crisis.

Europe’s economies will likely remain the focus of attention across markets all week as a number of bond auctions are due at the same time as Greece tries to clinch a debt-reduction deal with its private investors.

Sarkozy’s budget minister Valerie Pecresse said on Monday she was optimistic that S&P’s knockdown would not lead to a rise in the country’s borrowing costs.

In its announcement, Moody’s cited the French economy’s overall strength, but said bleak growth prospects in France and the region present “risks to the French government’s fiscal consolidation plans.”

Moody’s had said in October it was putting France on review, as Sarkozy and other European leaders struggled to find solutions to Europe’s protracted debt crisis.

On Monday, Moody’s said it “will update the market during the first quarter of 2012 as part of the initiative to revisit the overall architecture of our sovereign ratings in the EU.”

The rating agency detailed the strengths of the French economy, but noted that the country’s debt levels have deteriorated because of the “global economic and financial crisis” and were now among the weakest of all AAA countries.

“France, like other euro zone sovereigns, may face a number of challenges in the coming months. The need to provide additional support to other European sovereigns or to its own banking system cannot be excluded. In that case this could give rise to significant new [contingent] liabilities for the government’s balance sheet,” Moody’s warned.

Moody’s notes France has less room to maneuver than during the 2008 meltdown. “The domestic and external economic growth outlook presents significant risks to the French government’s fiscal consolidation plans.”

Sarkozy met later on Monday with Spain’s new prime minister, Mariano Rajoy, whose country was also downgraded by S&P.

The S&P move was especially brutal for France, one of the world’s biggest economies and a financier of bailouts for smaller, poorer euro zone countries.

Sarkozy has yet to speak publicly about the downgrade, leaving his cabinet ministers to try to calm the public.

Pecresse said on Monday that she doesn’t expect “mechanical consequences” of the downgrade because France has “credibility” and is a “sure value.”

She noted that the United States didn’t see its borrowing costs spike after last August’s decision by Standard & Poor’s to strip it of its AAA rating.

Associated Press