S&P downgrades France, Austria in mass euro zone rating cut
Bond rating agency Standard & Poor's has downgraded the credit ratings of nine euro zone countries, stripping France and Austria of their top ranking, a move that may complicate the currency union’s efforts to endure a worsening debt crisis.
The triple-A ratings of France and Austria have been cut by one notch to AA+, the agency said in a press release.
Malta, Slovakia and Slovenia also suffered a one-notch downgrade, while the ratings of Italy, Spain, Portugal and Cyprus have been cut by two levels.
"Today's rating 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 stresses in the eurozone," the agency said on its website.
Germany, by far the strongest economy in Europe and main contributor to Europe’s bailout fund for troubled economies, as well as Finland, the Netherlands and Luxembourg maintained their triple-A ratings.
A deal reached by the EU countries during the Decemebr 9 summit in Brussels, which provides for the creation of a fiscal union to deepen the integration of national budgets, "has not produced a breakthrough of sufficient size and scope to fully address the eurozone's financial problems," the agency said.
"In our opinion, the political agreement does not supply sufficient additional resources or operational flexibility to bolster European rescue operations, or extend enough support for those eurozone sovereigns subjected to heightened market pressures," the statement reads.
