Skip to comments.(EU Economic Commissioner Olli) Rehn slams “inconsistent” credit rating downgrades
Posted on 01/14/2012 9:24:33 AM PST by Olog-hai
France and Austria lost their triple-A credit ratings yesterday eveningan ill-starred Friday 13th Januaryas seven other eurozone countries were also downgraded by US-based credit rating agency Standard & Poors (S&P).
The move was described by European leaders as political and inconsistent, and China claimed the move cast doubt on the credibility of credit ratings agencies.
The two triple-A economies were nudged down one notch by S&P, to AA+, but retain top AAA rating from the other two main ratings agencies, Moody's and Fitch.
Two notches were struck from the ratings of Italy (to BBB+), Spain (to A), Cyprus (to BB+) and Portugal (to BB), whilst Germany kept its AAA rating, with a stable outlook. One notch was knocked from Malta (to A−), Slovakia (to A) and Slovenia (to A+).
Rumors of S&Ps move prompted stock market volatility earlier in the day, but there was some stabilization before markets closed.
Economic Affairs Commissioner, Olli Rehn, said that he regretted S&P's inconsistent decision made at a time when the euro area has taken decisive action in all fronts of its crisis response.
Michael Fuchs, deputy leader of the ruling German Christian Democrats, said: This step is out of order. Standard and Poors must stop playing politics. Why doesnt it act on the highly indebted United States or highly indebted Britain?
Official Chinese channels also condemned the S&P decision. News agency Xinhua, which often represents the Chinese government's official view, said in a commentary: The Standard and Poors (S&P) downgrade move, though containing some legitimate concerns, also raised fresh doubts over the credibility of ratings agencies.
It’s way off that scale. The needle’s stuck.