World     

S&P puts 15 euro zone nations on credit watch

Xinhua, December 6, 2011

• Standard and Poor's put 15 eurozone nations, including the area's six AAA rated countries, on "CreditWatch negative" on Monday due to deepening economic and political turmoil in the region, meaning there is 50 percent chance for these countries to be downgraded with the next 90 days.

  In its latest statement, S&P said "the CreditWatch placements are prompted by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole."

  These systemic stresses, according to the rating agency, stem from tightening credit conditions, higher risk premiums, continuing disagreements among European policy makers, high levels of government and household indebtedness and rising risk of economic recession.

  According to the S&P, their credit ratings may be cut depending on the result of the key EU summit on Dec. 9.

  Meanwhile, S&P maintained its negative outlook for Cyprus, and Greece wasn't put on "CreditWatch." The firm also said that ratings could be cut by one notch for Austria, Belgium, Finland, Germany, Netherlands and Luxembourg, and by up to two notches for the other governments.

  S&P's move came as investors cheered the Franco-German plan to rewrite the EU constitution for more central control of euro zone budgets.

  French President Nicolas Sarkozy and German Chancellor Angela Merkel met on Monday in Paris, trying to reach common ground on measures to boost coercive budget discipline in the region.

  In a joint press conference after the meeting, Merkel and Sarkozy said that Europe's two biggest economies were aligned on backing automatic penalties for deficit violators and locking limits on debt into euro states' constitutions.

Copyright © China.org.cn. All Rights Reserved