German Chancellor Angela Merkel says Europe still has a "long road" ahead to restore investor confidence, after a raft of credit rating downgrades of EU countries.
"The decision confirms my conviction that we in Europe still have a long road ahead of us until investor confidence is again restored," she told reporters in the northern German city of Kiel.
"But it's also apparent that we have pursued resolutely this road of a stable currency, solid finances and sustainable growth," she said.
Ms Merkel also stressed that Standard & Poor's, which yesterday decided to cut the ratings of nine eurozone nations including top-rated Austria and France but not Germany, was just one of three ratings agencies.
Standard & Poor's also left Ireland's credit rating of BBB+.
She said they had "taken note" of the decision. "It did not totally surprise us after discussions of recent weeks," she said.
French Prime Minister Francois Fillon defended his government's economic policies.
Mr Fillon said the move had been expected but it was an alarm call, which should not be over-dramatised or underestimated.
Earlier, EU Economic and Monetary Affairs Commissioner Olli Rehn criticised the decision by Standard & Poor's, describing the move as "inconsistent".
Mr Rehn said decisions taken by the EU, combined with action taken by the European Central Bank "have been instrumental in easing tensions in sovereign bonds markets".
The downgrade of France's coveted AAA rating is also bad news for President Nicolas Sarkozy, particularly as it comes just 100 days before a presidential election.
Mr Rehn said it was now important for governments to quickly finalise the contours of the European Stability Mechanism, the eurozone's future permanent bailout fund that EU leaders have decided to bring forward by one year to July 2012.
The ESM will succeed the European Financial Stability Facility, a temporary fund used to bail out Ireland and Portugal after the May 2010 Greece rescue.
The EFSF is also in danger of losing its AAA rating after countries backing it were downgraded.
Governments were already struggling to boost the firepower of the EFSF before Standard & Poor's decision was announced.
