Japan's fledgling recovery is under threat from falling prices, the government said today, as it conceded that deflation had returned to the world's second-biggest economy after a three-year gap.

This was the first time since 1975 that Europe's second-biggest economy, France, had been downgraded to AA+.

Two European Commission officials came to the defense of the stability rules intended to protect the euro as France, the euro area's second-biggest economy, showed no sign of adhering to them.

He insisted that the country was headed in the right direction and that no ratings agency would dictate the policies of France, which has Europe's second-biggest economy, behind Germany's.

And with Japan, the world's second-biggest economy, slumping again, he says he fears a "synchronized global recession" may be in the offing.

The world's second-biggest economy seems to be decelerating again.

That makes China the world's second-biggest economy.

And the collapse here is threatening the financial system of the world's second-biggest economy after the United States.

A free trade agreement with Japan, the world's second-biggest economy - if you don't count the European Union, which negotiates as one party for trade - would trump any other negotiations.

GDP US$4.4 trillion (the world's second-biggest economy)