Standard & Poor's has downgraded France's credit rating from AA+ to AA.
The ratings agency said problems existed due to weak economic growth, high unemployment and constraints on government spending.
It felt these factors were likely to mean the French government would find it hard to push through economic reform.
Unemployment was a particular concern as it now stands at 3.3m people, 11% of the population, and S&P predicted it would not reach below 10% until 2016. The agency said the unemployment rate was "weakening" support for financial reform and "depressing" long-term economic growth.
The French finance minister Pierre Moscovici said he "regretted" S&P's decision and that he believed France held the safest debt in the eurozone.
This is the second credit rating cut for France following a cut from AAA to AA+ in January 2012.
The the euro fell 0.2% to $1,3389 following the announcement.
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