S&P Downgraded 9 Eurozone Nations; Euro-Zone Policies Have Fallen Short

From CNN:

Standard & Poor's said Friday that it has downgraded the credit ratings of nine euro area governments, including AAA-rated France and Austria.

S&P lowered its rating for Italy, Spain, Portugal and Cyprus by two notches. The move means Italian bonds are now rated BBB+, dangerously close to the junk bond level that could make it even harder for the government to raise money.

France and Austria both had their top-tier credit rating lowered by one notch to AA+, said S&P. But Germany, Finland, the Netherlands and Luxembourg all maintained their AAA ratings.

S&P cut the ratings of Malta, Slovakia and Slovenia by one notch.
Specifically, the agency pointed to weakening economies, tightening credit conditions across the eurozone, rising interest rates for a growing number of nations and the "deleveraging" of both governments and households.

http://money.cnn.com/2012/01/13/markets/sandp_europe_downgrade/index.htm?hpt=hp_t1

From MarketWatch:

Standard & Poor’s credit analysts said Saturday that Euro-zone policy makers have failed to address the “broadening and deepening” financial crisis the region now faces, leading the agency to issue long-term downgrades on nine countries, including Cyprus, Italy, Portugal, Spain, Austria, France, Malta, Slovakia and Slovenia.

Perhaps most notably among the cuts late Friday, S&P downgraded France and Austria to AA+ from AAA, leaving only Germany, Netherlands, Finland and Luxembourg left as AAA-rated countries in the currency group. Portugal and Cyprus were downgraded to junk-bond status.

During a conference call Saturday morning, S&P credit analyst Moritz Kraemer said policymakers have yet to come up with solutions to the “systemic stresses” that plague Euro-zone nations during its debt crisis.

Among these problems, he said, are tightening credit conditions; weakening prospects for economic growth in the region; and continued disagreement among government officials over how the situation should be addressed.

http://www.marketwatch.com/story/euro-zone-policies-have-fallen-short-sp-2012-01-14?siteid=rss&rss=1