Ratings agency Standard and Poor's has downgraded the credit rating of France and several other Eurozone nations.

It lowered the long-term ratings on Cyprus, Italy, Portugal, and Spain by two notches, and lowered the long-term ratings on Austria, France, Malta, Slovakia, and Slovenia, by one notch.

S&P said Europe’s austerity and budget discipline alone were not sufficient to fight the debt crisis and may become self-defeating.

In a statement, S&P said: “Today's rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone. In our view, these stresses include: (1) tightening credit conditions, (2) an increase in risk premiums for a widening group of eurozone issuers, (3) a simultaneous attempt to deliver by governments and households, (4) weakening economic growth prospects, and (5) an open and prolonged dispute among European policymakers over the proper approach to address challenges.”

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