Within hours of being appointed, France's new prime minister Francois Bayrou faced his first ordeal: the country's credit rating was downgraded by credit rating agency Moody's.

The action, which will put pressure on the nation’s borrowing costs, reflects doubt that a new government can mend the deteriorating financial situation.

The yield on 10-year French debt rose to more than 3%, on the first trading day after the credit rating agency unexpectedly cut France's debt rating. View on euronews