Posted on 01/14/2012 9:24:33 AM PST by Olog-hai
France and Austria lost their triple-A credit ratings yesterday evening—an ill-starred Friday 13th January—as seven other eurozone countries were also downgraded by US-based credit rating agency Standard & Poor’s (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&P’s 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 Poor’s must stop playing politics. Why doesn’t 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 Poor’s (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.
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