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By Marshall Auerback

So the ratings agencies have finally followed through on the big threat and downgraded a number of the eurozone's credit ratings, including France and Austria, both of which have now lost their coveted Triple AAA status. Italy, Portugal and Spain were downgraded a further two notches.

What does this mean and why does it matter?

Investors (often badly informed) use ratings agencies like Fitch, Moody's and S&P as an indicator of default risk of a country. Countries that receive lower credit ratings are at a disadvantage when they sell bonds because buyers will not pay as much for bonds from a country perceived to be at risk. In effect, ratings...