Moody's rationale for the downgrade being that France’s long-term economic growth has been hit by its inflexible labour market and low levels of innovation eroding its competitiveness and industrial base.
It also cited France's exposure to the ongoing Eurozone crisis.
Moody’s is quoted by the Telegraph:
“Further shocks to sovereign and bank credit markets would further undermine financial and economic stability in France as well as in other euro area countries.
The impact of such shocks would be expected to be felt disproportionately by more highly indebted governments such as France.”