Tag Archives: Euro Credit downgrade

Europe Credit Downgrades

Europe Credit Downgrades have caused anger from the Eurozone and leaders are calling it: Incomprehensible” that Standard and Poor’s would downgrade Austria and France from their AAA ratings. S&P also downgraded Italy’s credit rating, as well as Spain, Cyrus and Portugal in previous cuts.

Europe Credit Downgrades

France was cut from AAA to AA+

Austria, Slovenia, Malta and Slovakia were all down graded one notch and in the past.

S&P’s Reasons for the Down Grades in a statement issued January 13, 2012:

Quote: ” Today’s ratings actions are primarily driven by our assessment that the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stress in the Eurozone” end quote

Germany was spared a downgrade and German Chancellor Angela Merkel urged the collective countries to push forward with changes more quickly and “try not to soften it”. German remains the only country in the 17 that maintains a AAA Triple A credit rating.

France’s Finance Minister Francois Baroin took the downgrade with a grain of salt and said his country is not planning any more austerity measures. “It is not good news, but it is not a disaster either” he said and “it’s not the rating agencies that dictate French Policy”.  Seems like he’s right on target and acknowledges the problems S&P has with its credibility.

You have to admit S & P has always had bad timing, including giving these countries triple AAA ratings during the 2008 financial meltdown which the agency maintained at that time. Standard and Poor’s inconsistency leads to many questions in why it would cause more disruption and instability with an untimely decision.

The whole scene is one of deep distrust of the money markets, the uncertainty is global including the US markets which remain relatively unregulated for more financial down turns.

S&P Timing in Euro Downgrade

S&P also has been run by republican supporters and the downgrade comes at a time when a global recession ties all countries to major debt. S&P’s credibility in the Euro downgrade has some questionable motives here that need to be examined fully. At a time when delicate talks are ongoing, deals for restructuring and paying off debt continue, S&P’s timing is suspicious to all.

The downgraded added to the uncertainty in Europe’s debt crisis and could not have come at a worst time, even though S&P has lost their credibility as one of three major US credit agencies.

S&P has yet to explain why it gave Goldman, Lehman Brothers, BOA and Citibank all Triple AAA credit ratings in 2007, knowing they were selling fake derivatives and toxic mortgages for a few years. S&P has strong ties to the big Wall Street banks in the club that has made the road to global financial recovery more difficult.

Viva La France!!

tags; S&P downgrade of Eurozone, S&P’s credibility problem, US credit agencies do not dictate French policy, France reacts to S&P downgrade, S&P bad timing in Eurozone crisis

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