S&P on Friday downgraded France's credit rating to "AA", a notch below the previous "AA+", dealing a blow to President Francois Hollande's embattled government.

"We believe the French government's reformsto taxation as well as to product, services and the labor market will not substantially raise medium-term growth prospects and that ongoing high unemployment is weakening support for further significant fiscal and structural policy measures," the agency said in a statement.

Hollande had pledged to reverse the trend of rising joblessness by the end of the current year, but critics have become increasingly doubtful.

Unfair treatment?

Standard & Poor's also saw little leeway for the government to increase already high tax levels in the country and noted it was not able to detect a strong political will to considerably decrease public spending.

Not amused by the agency's downgrading, French Finance Minister Pierre Moscovici deplored what he called "the critical and inexact judgments" made by S&P.

Echoing his criticism, Prime Minister Jean-Marc Ayrault insisted France's credit rating remained among the best in the world, claiming the agency "did not take into account all the reforms" tackled by the government.

hg/dr (AFP, AP)