France At Risk Of Credit Rating Downgrade

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France At Risk Of Credit Rating Downgrade

Post by Guest on Fri Jan 13, 2012 6:24 pm

Ratings agency Standard & Poor’s is to downgrade the credit rating of a number of Eurozone countries including France, reports have indicated.

The euro fell to a 17-month low on the currency markets amid the reports - the latest in the eurozone crisis - and stock markets across the world also declined.
It is understood the agency will confirm the announcement after markets close in the US.
Other countries within the single market are also at risk of a downgrade by the prominent ratings agency.
Reuters columnist Peter Thal Larsen told Sky News: "If we're talking about expectations then clearly France is what we would consider to be most vulnerable to a potential downgrade."

Standard and Poor's have not yet confirmed the news

A French downgrade would be significant due to the country's role as one of the AAA guarantors of the eurozone's rescue fund, the EFSF, which would in turn also need to be downgraded.
Germany would then become the only major AAA-rated economy underwriting the fund
This would make it more difficult to raise funds to bail out weaker countries, like Italy and Spain, if the need arose.
But Mr Larsen added that the move by Standard & Poor's (S&P) would not be particularly surprising, as the ratings agency had put several eurozone countries, including Germany, on notice a few months ago.
He said the downgrades would provide a "reality check" to the markets that the eurozone's problems are nowhere close to being solved.
Germany and The Netherlands are among the countries not believed to be affected by a downgrade.
The announcement is particularly bad news for Nicolas Sarkozy who faces presidential elections later this year and has staked much of his reputation on being the man to lead France out of the crisis.

News of a downgrade will be bad news for President Sarkozy - while Angela Merkel's Germany is safe

Valerie Pecresse, a French government spokeswoman, told a television channel in the country: "France today is a safe investment, it can repay its debt and the news concerning our deficit is better than expected."
She made no direct comment on the country’s credit rating, but French finance minister Francois Baroin reportedly visited at President Sarkozy's offices on Friday afternoon.
Last December, when rumours of a potential French downgrade began, politicians in the country reacted strongly, suggesting that any downgrade would be unjustified.
It was even suggested publically by one senior figure that Britain should be downgraded before France because it had "as much debt, more inflation, less growth than us and…credit is slumping".
Other Eurozone countries rumoured to be downgraded include Italy, Austria and Slovakia.



http://news.sky.com/home/business/article/16148669

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Re: France At Risk Of Credit Rating Downgrade

Post by Guest on Fri Jan 13, 2012 6:37 pm

You know I wonder the need of this 'agencies'... They seem to be doom saying alot lately and even if they do 'downgrade' France or whoever else- it dosen't change the situation in France as it stands today. Doing this seems to just scare people and shake the markets- which is surely the last thing the world needs.

On the other hand weren't they have a go at our economy not long ago; I guess we can at least blow rasperrys from our side of the Channel Twisted Evil lol!

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Re: France At Risk Of Credit Rating Downgrade

Post by Guest on Fri Jan 13, 2012 7:08 pm

Anything that has that little shit Sarkozy squirming cant be all bad!

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