France’s Finance Minister confirmed early reports that Standard and Poor’s was cutting its debt rating on the country and said others will be downgraded as well.

S&P warned in December that most of the euro zone had been place on watch for possible downgrades.

That warning may have given equity markets the heads up, and so while the reaction to news the downgrades could come Friday is negative, there has not been a massive sell-off on Wall Street or across major European equity markets.

French fund manager Jeremy Gaudichon said: "It’s not a good news for France of course. But the downgrade of the U.S. last summer gave the confirmation that we can live without the triple-A and even have a very low rate. So we don’t have to over-estimate this news. Of course it’s not good news, but it’s not dramatic."

Demonstrators from the left-wing Parti de Gauche political party demonstrate outside the offices of Standard and Poor's in Paris, January 13, 2012. [Photo/CNTV]

But the money that is coming out of stocks is finding a place to go, says Tom Bradley, who oversees the institutional business for TD Ameritrade. He said: "So whenever you see downgrades in other areas - I think you always see a flight of money to what they deem to be the safest investment and that is typically U.S. treasuries. I think this will continue to drive capital towards safety and that’s the United States."

The downgrade means France, which has partnered with Germany in trying to end Europe’s two-year debt crisis, will face higher borrowing costs.

On the streets of Paris - there was dismay. But that famous French pride was still evident.

Q: "What measure (will it impact us?) I think it’s going to mean more austerity measures which will make things more difficult."

A: "It’s the poor I’m worried about. This situation is going to traumatize them.""Long live France, long live the Republic."

France is Europe’s second biggest economy, Germany, which is the biggest, is not expected to see a ratings change.