France downgrade a reminder that eurozone not mended

It may be that the reasons for Standard & Poor's decision to cut France's credit rating will resonate more than the downgrade itself.

Because S&P is very publicly criticising France for not doing more to lift its economy out of the economic doldrums and cut persistently high unemployment.

For the ratings agency, the French government is doing too little to cut the burden of tax, reduce public spending and provide great freedom for the private sector.

This is what S&P says:

"In our opinion, the economic policies the government has implemented since we affirmed the ratings on France on Nov. 23, 2012 have not significantly reduced the risk that unemployment will remain above 10% until 2016, compared with an average of 8%-9% prior to 2012. In our view, the current unemployment levels are weakening support for further fiscal and microeconomic reforms, and are depressing longer term growth prospects.

"France's real economic output rebounded to the levels reached in the fourth quarter of 2007 only in 2013. We are projecting close-to-zero real GDP growth this year, followed by a cyclical recovery to an average of just over 1% for 2014-2015."

Not everyone will agree. Some in France - particularly among the "enarques", or elite - may well accuse S&P of straying into ideological territory and tainting its own putative impartiality. Others will of course remind us all that the reputation of S&P and the other ratings agency for getting it right is not exactly immaculate.

But the critique is shared by most international investors, and its public restatement may make them warier of lending to France, which could be expensive for the country.

Coming on the back of yesterday's decision by the European Central Bank to cut interest rates to almost zero, to ward off the threat of deflation and a return to recession, it is more evidence that the eurozone's structural weaknesses are far from being fixed.