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France's borrowing costs keep rising, as worries grow it will lose prized AAA rating
PARIS (AP) ' The interest rate France pays to borrow money is rising again ' and along with it fears that the country will lose its cherished AAA credit rating.
Theoretically, at least, that highest rating allows France to borrow money from markets cheaply. But France pays far more than its neighbors ' 3.42 percent for a 10-year bond on Monday ' with the same rating.
France holds presidential elections next spring, and President Nicolas Sarkozy and his conservative party know that losing the rating could seal their fate. His government has twice this year introduced a raft of budget cuts to ensure that it meets its deficit-reduction targets.
Many say those cuts aren't sufficient. The questions remains, however, whether they'll hold off the ratings agencies until after the election.