Au revoir to AAA

They’ll be choking on their croissants on the Champs-Élysées today as millions of French citizens wake up to discover their prized triple-A credit rating has been downgraded to AA+ — the same rating as tiny Estonia.

France was one of several European countries that got their fiscal comeuppance yesterday when Standard & Poor’s downgraded European debt across the board.

S&P’s whacking of French debt means Paris loses its bragging rights of being one of just 15 nations in the world with top AAA credit — better than even the US.

Immediately, French officials tried to downplay the significance of the debt debacle.

“It’s not a catastrophe,” French Finance Minister Francois Baroin told France 2 television. Baroin was quick to point out that France now has the same rating as the US.

Austria also lost its AAA credit rating, dropping one notch to AA. Both face more possible downgrades.

S&P took its harsh moves to show displeasure with the lack of progress made by European leaders to tame the eurozone debt crisis.

“In our view, the policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,” S&P said in a statement.

Europe’s credit spankings, however, didn’t touch the top rating of Germany, the biggest economy in Europe, and also left intact the AAA ratings of the Netherlands, Finland and Luxembourg.

Cyprus, Italy, Portugal and Spain were cut by two notches, while Malta, Slovakia and Slovenia were cut one notch.

The euro dived to its worst low against the greenback in 16 months, dropping to $1.2665.

Generally, countries are forced to pay a higher interest rate on their debt as their ratings are lowered — to entice investors to take on the added risk.

Analysts said the impact of the downgrade might show up for France in its bond auction on Jan. 17. On that date, France will attempt to raise $11 billion and watchdogs will be keeping a close eye on the auction to see if the country will be forced to pay a higher rate.

Here in the US, Treasuries rose in price and yields sank six basis points — to 1.87 percent, in the wake of S&P’s move as investors sought the safety of American debt.

“Europe still faces a huge hurdle in fixing itself, refinancing its debt, and we don’t know what degree of recession they will be in — all of which is supportive of Treasuries,” Gary Pollack, head of fixed-income trading at Deutsche Bank’s Private Wealth Management unit, told Bloomberg.

The reaction of stocks here and abroad was muted.

The Dow Jones industrial average fell less than 1 percent, to 12,422.06, but rose off its lows after Chicago Fed President Charles Evans told reporters that aggressive easing could speed a US economic recovery by one or two years.

The S&P 500 Index and the Nasdaq also gave up less than 1 percent and gained off their low points of the days after Evans’ comments.