“Germany is now the only true AAA credit in Europe.”
Citigroup Expels The Netherlands From Europe’s “Core”
by Tyler Durden
Some bad news for our Dutch readers: AAA-rated Netherlands, which had until now been perceived together with Germany, as one of the two truly core countries of Europe, has just been expelled from the exclusive club by Citi’s Jurgen Michels, a move which will likely be bandwagoned shortly by other sellside analysts, and within 3-6 months, the rating agencies as well, because as of now Holland’s “untouchable reputation has been tarnished. Not to mention what’s left of the bond vigilantes who will likely not take too kindy to this implicit downgrade of Holland. To wit: “While Dutch general government debt remains much below the euro area average (66% of GDP in 2011 compared to 88% for the euro area as a whole) and the centre-right minority government of PM Mark utte and Finance Minister Jan Kees de Jager has long been an advocate of strict fiscal rules in the euro area, the Netherlands no longer seems to satisfy all of our other requirements for Core membership. ” This means that according to Citi, and shortly everyone else, Germany is now the only true AAA credit in Europe.
Some highlights from Citi’s report “Netherlands – No Longer Core”