Eurozone Placed On Credit Downgrade Watch
The agency’s announcement could throw efforts to save the euro into disarray
11:51pm UK, Monday December 05, 2011
The bureau will place most of the nations in the single currency on credit watch negative, including six that currently hold the top AAA rating, Bloomberg reported.
The financial news organisation quoted two anonymous officials, who spoke out ahead of a summit of European leaders to be held on December 9.
The news could throw efforts to stabilise Europe’s financial crisis into disarray.
The Financial Times reported that Standard and Poor’s (S&P) were planning to reduce the AAA ratings of Germany, France, the Netherlands, Austria, Finland and Luxembourg.
The bureau has warned all six governments that their ratings could be lowered to AA+ if a credit watch review failed to convince their experts, the newspaper said.
Although a downgrade of France had largely been expected, the inclusion of Germany has come as a surprise.
S&P were quoted in the Financial Times as saying it was worried about “the potential impact… of what we view as deepening political, financial, and monetary problems with the European economic and monetary union”.
Earlier, German Chancellor Angela Merkel and French President Nicolas Sarkozy, sought to restore confidence in the troubled European currency with a joint call for changes to the European Union treaty, so that countries using the euro would face automatic penalties if budget deficits ran too high.
Stock prices rose and borrowing costs for European governments dropped sharply in response to the changes proposed.
source : news.sky.com
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Submited at Tuesday, December 6th, 2011 at 12:00 am on Business by madison
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