Credit Ratings Blitz For Eurozone Countries
To view this content you need Flash and Javascript enabled in your browser.
Please download Flash from the Adobe download website.
10:39pm UK, Friday January 13, 2012
France, Austria, Italy, Spain, Portugal, Slovakia, Malta, Slovenia and Cyprus have all been cut in a brutal round of downgrades.
France and Austria both now hold AA+ ratings, while Italy, formerly an A-rated country, holds a BBB+.
Spain will move down to an A rating, while Portugal moves to BB, Slovakia to A and Cyprus to BB+.
Malta now holds an A rating and Slovenia finds itself on A+.
Austria, France, Malta, Slovakia, Slovenia, Cyprus, Italy, Spain and Portugal also had their long-term ratings lowered.
Only Germany, The Netherlands, Finland and Luxembourg kept their top-notch ratings in the cuts.
Standard and Poor’s have not yet confirmed the news
Ireland and Greece will also not face further bad news, according to reports.
The news came as speaks on slicing Greece’s big debt appeared close to collapse.
The bureau stated its actions were primarily driven by insufficient policy measures by european leaders to fully address “systemic stresses”.
It summed up the response to the eurozone crisis so far as “broadly adequate”, but stated this could change as the crisis evolves.
Speaking on France 2 television, Francois Baroin stated his country’s notification was a “half-surprise”.
“It is not good news,” he said, but insisted the country was taking the right direction.
“The markets had perhaps anticipated the move, which is why their reaction was moderated this afternoon.”
The country insisted it would not implement more austerity measures despite the downgrade, but would stick toits planned reforms.
The euro fell to a 17-month low on the currency markets amid early reports of the news – the latest in the eurozone crisis – and stock markets across the world also declined.
French president Nicolas Sarkozy also held crisis speaks with key ministers after news of the downgrade emerged.
A French downgrade is significant due to the country’s role as one of the AAA guarantors of the eurozone’s rescue fund, the EFSF, which would in turn also need to be downgraded.
Germany would then become the only major AAA-rated economy underwriting the fund.
This would make it more difficult to raise funds to bail out weaker countries, like Italy and Spain, if the need arose.
Standard & Poor’s (S&P) had put several eurozone countries, including Germany, on notice a few months ago.
It is likely that the downgrades will provide a “reality check” to the markets that the eurozone’s problems are nowhere close to being solved.
News of a downgrade will be bad news for President Sarkozy – while Angela Merkel’s Germany is safe
The announcement is particularly bad news for Nicolas Sarkozy, who faces presidential elections later this year and has staked much of his reputation on being the man to lead France out of the crisis.
Valerie Pecresse, a French government spokeswoman, told a tv channel in the country: “France this day is a safe investment, it can repay its debt and the news concerning our deficit is better than expected.”
Last December, when rumours of a potential French downgrade began, politicians in the country reacted strongly, suggesting that any downgrade would be unjustified.
It was even suggested publically by one senior figure that Britain should be downgraded before France because it had “as much debt, more inflation, less growth than us and…credit is slumping”.
source : news.sky.com
Related News:
- Trump’s Miss Universe Pageants Now Open To Transgender Women
- IMF to stress test Australian banks
- Romney states no to Obama’s ‘big, bad things’
- Congress’ brinksmanship is not winning over the public
- Meryl Streep film The Iron Lady is criticised by Margaret Thatcher’s biographer
- Eurozone Placed On Credit Downgrade Watch
- Snipes Sued Over Credit Card Debt
- Apple’s App Store Now Accepts Yuan Payments In China
- New PlayStation Credit Card Looks to Reward Gamers for PSN Purchases
- Steam Forum Hacked, Time To Panic?
Details :
Submited at Saturday, January 14th, 2012 at 12:00 am on Business by chuck
Comment RSS 2.0 - leave a comment - trackback