S&P threat of rating cuts may hit eurozone rescue
Fifteen out of 17 eurozone nations – including Germany – were threatened with downgrades to their credit ratings in a move that may imperil the foundations of a landmark rescue deal agreed on Monday.
By Louise Armitstead
05 Dec 2011
Standard & Poor’s (S&P) last night put all members of the single currency – barring Cyprus and Greece – on “credit-watch negative” because of a rise in the “systematic stresses” in the eurozone in recent weeks.
The countries under review include the six eurozone members with a AAA-rating, France, Germany, Austria, Finland, Luxembourg and the Netherlands.
S&P highlighted five reasons for the move, including tighter credit conditions, a greater risk of eurozone recession, as well as the “continuing disagreements among European policy makers on how to tackle the immediate market confidence crisis”.
S&P added there was a greater than 50pc chance the countries will be downgraded. It expects to conclude its review “as soon as possible”following the pivotal European Union summit starting on Thursday.
Cyprus, which is already on credit watch, and Greece – relegated to “junk status” by S&P, were unaffected.