The French can always blame their latest bit of financial bad news on the Curse of The Economist.

An overnight announcement that France had lost its prized triple-A debt rating came after The Economist ran a cover story describing the country as a time bomb at the heart of Europe. French sensibilities, including those of the government, were outraged by a report that described France as potentially the biggest danger to the European single currency. It also described President François Hollande as half-hearted about introducing much-needed reforms in view of the gravity of France’s economic problems.

The magazine ominously reminded the French that the last time it targeted a European country for its failure to reform – Italy in mid-2011 – the government of Silvio Berlusconi was out by the end of the year.

For François Hollande, the Socialist president elected six months ago, the timing is awkward. Over the past two weeks his government has begun for the first time to recognise the scale of the country’s economic difficulties and to start to do the right thing to deal with them. In particular, in response to increasing alarm about France’s loss of competitiveness, it recently announced €20bn of tax breaks for companies to offset the country’s heavy payroll charges.

So why has Moody’s identified growing risks in France right now? In part, it says, these are linked to troubles in the rest of the eurozone. It notes the country’s high exposure, particularly through its banks, to the battered peripheral economies. It also points to the growing obligations on France as a result of collective European decisions to support such nearly bankrupt countries.

Yet a fair chunk of its analysis touches home-grown problems that France cannot blame on others. Moody’s identifies two other reasons for its downgrade. First, deteriorating long-run economic prospects due to “the country’s persistent structural economic challenges”: “rigidities in labour and services markets” (high taxes and social contributions; high employment protection legislation), “low levels of innovation”, and a “gradual but sustained loss of competitiveness and the gradual erosion of its export-oriented industrial base”.

Second, Moody’s points to growing uncertainty about the fiscal outlook. It describes as “overly optimistic” the government’s forecast of GDP growth of 0.8% in 2013 and 2% from 2014. Mounting unemployment and new tax increases, are likely to dampen consumption further. It anticipates fiscal slippage, and the likely need for more consolidation measures to meet budget-deficit targets.

In the latest official response to The Economist’s report, Najat Vallaud-Belkacem, the government spokesperson, wrote on Monday that France was “credible” and was being twice as ambitious as the eurozone average in terms of cutting its deficit. And more efforts would be made on cutting expenditure to improve France’s competitiveness, she wrote in an op-ed rebuttal.

As Europe’s leaders gather for a tense summit in Brussels, and as the finance ministers again failed to agree on a Greek bailout, the Moody’s downgrade of the French AAA status, considered by Frenchmen as hallowed as the gold standard used to be, is yet another timely reminder that we are not out of the woods yet.