Standard and Poor’s threatens wholesale downgrade of euro zone nations
The credit rating agency Standard & Poor’s has placed 15 European countries on debt watch and warned all of the six triple A rated governments that their ratings could be lowered, reports the Financial Times. While the potential of a downgrade of France was long considered by financial analysts, the breadth of S&P’s statement came as a surprise to many.
Others, including Luxembourg’s Prime Minister, asserted that the action was excessive and hinted that it might be based in politics, not economics.
Prime Minister Jean-Claude Juncker, according to Bloomberg News, told a German radio program, “I have to wonder that this news reaches us out of the clear blue sky at the time of the European summit — this can’t be a coincidence.”
While defending the merits of its analysis, S&P confirmed that the timing of the release – prior to this week’s debt summit in Brussels – was no coincidence.
“After two years of crisis management which has failed to stem and arrest the crisis we feel the time is running shorter to stem the crisis. This summit’s success is more critical than ever before,” an S&P director told CNBC.