The credit ratings agency Standard & Poor's has downgraded the EU bailout fund to AA+ from AAA in what has been described as another ax swing at Europe.

The move was largely expected after S&P downgraded nine euro area governments last week, including France and Austria, two big backers of the European Financial Stability Facility.

Like France and Austria, the EFSF is now rated AA+, according to S&P.

The downgrade could affect the EFSF's ability to raise money cheaply.

Alternatively, the fund could be endowed with less money, which would be better guaranteed.

Depending on how European officials react to the cut, S&P said the rating on the EFSF could either be restored or further downgraded.

"The outlook is developing, which reflects that we could raise the EFSF's long-term rating to AAA if we see that additional credit enhancements are put in place, but also the likelihood that we could lower the rating further if we conclude that the creditworthiness of the EFSF's members will likely be further reduced over the next two years," the ratings agency said in a statement.

Earlier in the day, another ratings agency, Moody's, said it would allow France to maintain its AAA rating for now, although it warned that the deterioration in France's debt position was "putting pressure" on the country's stable outlook.

S&P cut its ratings for France, Italy, Spain, Cyprus, Portugal, Austria, Slovakia, Slovenia and Malta late on Friday.

The idea of the EFSF was for countries with top credit ratings to borrow money cheaply that they could then lend on to countries that were struggling.

But Friday's downgrade took away two of its six AAA rated guarantors.

That will reduce the fund's AAA rated guarantees from EUR 440 B to about EUR 260 B.