Merkel says eurozone must act fast German chancellor Angela Merkel has called on eurozone governments speedily to implement tough new fiscal rules after Standard & Poor's downgraded the credit ratings of France and Austria and seven other second-tier sovereigns. Ms Merkel on Saturday called on governments to implement rules outlined in December, and to activate "as quickly as possible" the €500bn-European Stability Mechanism, currently scheduled to succeed the old eurozone rescue fund EFSF midyear. Her call came on Saturday as eurozone leaders tried to shrug off Friday's downgrade by pointing to reforms already under way to haul the currency area out of its debt crisis - although their annoyance with Standard & Poor's was also evident. Chancellor Merkel said the downgrade made implementation of steps towards fiscal union - to be codified in an inter-governmental treaty which could be signed by the end of January - urgent. She called on leaders to resist softening up the so-called fiscal compact "here, there and everywhere" as details were hammered out. A speedy introduction of the ESM - already brought forward from 2013 to the middle of 2012 - could prove to be an important step on this path, the chancellor said. Nevertheless, Ms Merkel played down consequences for the current rescue fund, which could now lose its own triple A rating. "I don't see any need to change anything with regard to the EFSF," Ms Merkel said, suggesting she would accept a diminished EFSF in the event of a downgrade rather than raising guarantees. The loss of France's much-prized triple A rating three months from elections is a blow for president Nicolas Sarkozy. It also threatens to make it harder for him to negotiate with Germany - already seen as in the driving seat - as an equal in terms of sovereign debt rating, on issues relating to the eurozone crisis. Jacques Cailloux, analyst at RBS, said in a note: "France's position at the European negotiating table is likely to be weakened vis a vis Germany. We are now challenged to implement the fiscal compact even quicker ... and to do it resolutely, not to try to soften it Angela Merkel But François Fillon, France's prime minister said there was no reason for the downgrade to change the balance of power between the two largest eurozone economies. I do not think this decision will change relations between France and Germany, firstly because this relationship is structural ... and because the destinies of France and Germany are completely aligned. Mr Fillon said the downgrade was "a warning which must not be dramatised but should not be underestimated." He said the S&P decision had been driven: "more by the eurozone situation than our own" and called for the swift implementation of the measures agreed at the December 9 eurozone summit. Mr Fillon ruled out the need for additional austerity measures in France, saying that the government would continue its focus on structural reform to drive growth and would not allow rating agencies to dictate policy. Putting in place drastic spending cuts in the current economic context would be a major risk to growth. We will not to do it. That its why we are concentrating our efforts on structural reform to improve France's competitiveness. He said there was no reason to revise the government's 2012 growth forecast of 1 per cent - at least not until the growth figures for the last quarter of 2011 had been published. Putting in place drastic spending cuts in the current economic context would be a major risk to growth François Fillon Austrian finance minister, Maria Fekter, said exposure to struggling neighbours Hungary and Italy played a role in the downgrade, but it was a wake-up call for the country to cut debt and deficits as well as an indictment of Europe's inability to move quickly, Reuters reported. She conceded that the downgrades had not been a surprise and that they showed the eurozone still had a long way to go to restore the confidence of investors. Speaking on the fringes of a start-of-year retreat of her Christian Union lawmakers in the city of Kiel, Ms Merkel said she would consider calls from her party colleagues for legislation to bar institutional investors such as insurance companies from selling bonds when ratings were downgraded, or fell below investment grade.