France and Britain are most vulnerable within Europe to a rating review following the U.S. downgrade, with anaemic growth and hefty borrowing placing them among the shakiest of the world's triple-A rated lenders, Reuters reported in an analysis. Both countries have stable rating outlooks, making a sudden downgrade unlikely and markets have been so impressed by Britain's debt-cutting strategy that they have pushed its bond yields to record lows. But a surge in the cost of insuring French debt against default on Monday highlighted alarm sparked by Friday's U.S.

While the financial world was watching Capitol Hill last week, offering up febrile prayers for a ceiling-smashing bill, the International Monetary Fund quietly wondered whether France could hang on to its platinum credit card, The Wall Street Journal Agenda blog reported. Last Wednesday it warned that the country would miss its 3% budget deficit target for 2013 unless it took further steps to cut spending, which were also needed to safeguard—guess what—its credit rating.

It is too early to say what will finally emerge as a deal between European financial groups and governments. But there is a growing consensus that the proposal circulated by the French banking sector on Monday was a credible blueprint, the Financial Times reported. “The French proposals have catalysed the debate,” said Charles Dallara, managing director of the Institute of International Finance, which represents most global banks and helped organise the Rome talks.

Europe's sovereign-debt crisis washed closer to U.S. shores Wednesday after Moody's Investors Service warned it may downgrade three French banks that rely heavily on U.S. money funds for short-term financing, The Wall Street Journal reported. Moody's cited the banks' exposure to Greek debt, and added that it may do the same to other euro-zone banks. The three banks—BNP Paribas SA, Crédit Agricole SA and Société Générale SA—have all said recently that their exposure to Greece remains manageable.

The French government has opened the door to a compromise in the stand-off over Ireland’s corporate tax rate, saying it will take into account Ireland’s “singular situation” in deciding its stance, the Irish Times reported. Amid signs that Paris and Berlin are waiting for a gesture from Ireland, government spokesman François Baroin said no decision had been taken on whether to maintain French opposition to Ireland’s request for a reduction in the interest rate on its bailout loans. “The discussions are continuing.

France will refuse a cut in the cost of Ireland’s European bail-out loans at next week’s meeting of eurozone finance ministers as long as Dublin maintains its ultra-low corporate tax rate, the Financial Times reported. Paris appears to be setting itself against a growing European view that Ireland should be given some extra room for manoeuvre as European leaders weigh the need for a new aid package for Greece, which could also involve a second rate cut.

Government officials from France and Germany went out of their way Monday to stress the need for a unified euro zone even as intensifying worries over Greek debt piled pressure on the currency bloc, The Wall Street Journal reported. In a Europe Day speech, French Prime Minister Francois Fillon on Monday said it's paramount that euro-zone states continue to show solidarity towards one another—signaling France could agree to go further to help Greece meet its funding needs for next year.

Italy's market watchdog Consob is to speed up its examination of the offer prospectus filed by French dairy group Lactalis for Italian rival Parmalat, Consob's head said in an newspaper interview on Sunday, Reuters reported. "We will examine it (the prospectus) rapidly, even before the legal timeframe limit," Giuseppe Vegas was quoted as saying in La Stampa. Under Italian law Consob has 15 days to look at a takeover offer but can ask for more time if it needs further information. Lactalis filed documents with Consob on Friday.

French President Nicolas Sarkozy is planning to force companies to give staff a bonus when they raise dividends, but both businesses and unions slammed the proposal, The Wall Street Journal reported. Mr. Sarkozy said late Wednesday that he was in favor of a such a rule; it would apply only to companies with more than 50 employees.

France's Finance Minister Christine Lagarde pledged Monday to cooperate with investigators probing her involvement in the arbitration process related to the bankruptcy of formerly state-owned bank Credit Lyonnais, Dow Jones Daily Bankruptcy Review reported.