Standard and Poor's said sovereign ratings on France, Spain, Italy, Ireland, and Portugal likely would be lowered by one or two notches if the euro area fell into another downturn and government borrowing cost rose.

Yet, the downgrade is more linked to the pace of economic growth as S&P revealed that looking ahead, we believe growth in the coming 18 months will be very weak, averaging between 1.0 percent and 1.5 percent for the euro zone next year.

The rating agency mentioned that France would likely be downgraded to 'AA+' from 'AAA' because of a deteriorating fiscal position, even if the amount of stress applied remains modest.