Moody’s Cuts Spain and Italy, Puts France and U.K. on Negative Outlook
Moody’s Investors Service downgraded the credit ratings of six European nations overnight and warned it may soon cut the triple-A credit ratings of France, Britain, and Austria as well.
Citing growing risks from Europe’s sovereign debt crisis, Moody’s cut the ratings of Italy, Portugal, Malta, Slovakia, and Slovenia by one notch late Monday, while lowering Spain’s rating by two notches and putting Austria, France, and the United Kingdom on ‘outlook negative,’ implying a 30 percent chance they will lose their AAA credit ratings within 18 months.
Moody’s said it was worried about Europe’s ability to make the reforms necessary to tackle the debt crisis, and said the region’s weak economy could undermine any austerity drives meant to bolster governments’ finances.
Moody’s left Germany’s top-tier rating alone, describing it as “appropriate,” and also affirmed its triple-A rating on the euro zone’s bailout fund, the European Financial Stability Facility, but lowered the outlooks for France, Austria, and the U.K. due to “a number of specific credit pressures that would exacerbate the susceptibility of these sovereigns’ balance sheets.”
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