Downgrade of France reflects ongoing frustration with Euro zone inaction
It turns out that bad luck associated with Friday the 13th had nothing to do with black cats or other ominous signs, but from Standard & Poor’s. Heavily critical of the failure of Europe’s leaders to focus on solutions to the three-year old financial crisis, S&P chose to downgrade the credit rating of France, Austria and several other nations.
Some analysts believe S&P’s judgment that the EU has failed to address the “ongoing systemic stresses” in the euro zone may provide a needed push.
“Perhaps this will now concentrate the minds of EU policy makers making them realize that no country is immune to being pulled down by the euro crisis,” Sony Kapoor, managing director of policy advisory firm Re-Define, told Bloomberg News.
While it may have been a Black Friday, the Wall Street Journal found that many bond traders already had factored the downgrade into their analyses, thus limiting the impact on the markets.
But, while some saw the downgrade coming, others saw a conspiracy in the S&P’s action. According to the Financial Times, the downgrade has added fuel to conspiratorial fires among those who believe the agencies are intentionally trying to stoke a crisis.