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Merkel: ‘Long Road’ Ahead for European Economic Recovery

German Chancellor Angela Merkel speaks in Kiel, northern Germany, January 14, 2012.

German Chancellor Angela Merkel says the downgrading of credit ratings of nine European countries shows that the European Union has a "long road" ahead to restore investor confidence.

She spoke to reporters Saturday in the northern German city of Kiel. She said the downgrade was not a surprise and said the eurozone will speed up implementation of its permanent rescue fund known as the European Stability Mechanism.

Credit-rating firm Standard and Poor's, one of three worldwide agencies, made the downgrades Friday, saying national leaders are moving too slowly to strengthen the troubled eurozone's finances.

France lost its top-tier AAA rating, while Italy and Spain were downgraded by two notches. Germany, which has Europe's largest economy, kept its AAA rating.

Lower credit ratings may raise the cost of borrowing money for those governments.

French Finance Minister Francois Baroin has called the downgrade "bad news," but “not a catastrophe." He said ratings agencies would not dictate French economic policies.

In Greece, where the European debt crisis began, a group of private lenders met with government officials Friday but failed to reach an agreement to help reduce the nation's debt.

Some information for this report was provided by AP, AFP and Reuters.