France and Austria have lost their AAA ratings and have been downgraded by Standard & Poor’s to AA +.

Eurozone countries’ sovereign debt downgrades will inevitably increase the cost of government debt, and in turn increase bank debt – all of which puts increasing pressure on the cost of trade finance in the eurozone region.

A spokesperson for Société Générale declined to comment when contacted by GTR.

However a source close to the bank told GTR that: “The downgrade of France has been widely flagged and as such is already discounted by the financial markets. Indeed, a downgrade of France’s credit rating is already reflected in the spread between French and German government bonds, which is around 150 basis points.”

Portugal was downgraded by four notches from Baa1 to Ba2 and Cyprus from BBB to BB+.

Spain has been cut from AA- to A, while Germany has kept its AAA rating.