Washingtonpost news updates: Standard & Poor’s cuts credit ratings for France and eight other European nations

Friday, January 20, 2012

Standard & Poor’s cuts credit ratings for France and eight other European nations

France loses AAA in euro downgrade - The Washington Post Print SubscriptionConversationsToday's PaperGoing Out GuideJobsCarsReal EstateRentalsClassifiedsHomePoliticsCampaign 2012CongressCourts &LawThe Fed PageHealth CarePollingWhite HouseBlogs & ColumnsIssues: EnergyTop Blogs

Election 2012 | Felicia SonmezThe Fix | Chris CillizzaFederal Eye | Ed O’KeefeFact Checker | Glenn KesslerOpinionsAll OpinionsPostPartisanLeft-LeaningRight-LeaningTolesCartoonsTelnaesAnimationsLocalColumnist IndexLocalDC: Politics| NewsMD: Politics| CommunitiesVA: Politics| CommunitiesCrimeEducationOn Faith/LocalObituariesTraffic & CommutingWeatherBlogs & ColumnsThe Root DCTop Blogs

State of NoVa | Loudoun supervisor’s anti-gay campaignThe Buzz | Post’s Air Florida coverage from 1982Where We Live | A $3.19M home with 67 windowsGoing Out Gurus | Plan your weekendSportsRedskins/NFLCapitals/NHLWizards/NBANationals/MLBDC United/SoccerCollegesAllMetSportsOther SportsBlogs & ColumnsTop Blogs

The Insider| Mike JonesCapitals Insider| Katie CarreraWizards Insider | Michael LeeNationals Journal| Adam KilgoreNationalCorrectionsEnergy & EnvironmentHealth & ScienceHigher EducationNational SecurityOn FaithOn LeadershipInnovationsOn GivingBlogs & ColumnsTop Blogs

Ideas@InnovationsPost LeadershipUnder GodCheckpoint WashingtonWorldAfricaTheAmericasAsia &PacificEuropeMiddle EastNational SecurityWar ZonesSpecial ReportsCheckpoint WashingtonBusinessEconomyIndustriesLocal BusinessMarketsPolicy&RegulationTechnologyWorldBusinessBlogs & ColumnsInnovationsOn Small BusinessTop Blogs

Wonkblog | Ezra KleinPost Tech | Cecilia KangFaster ForwardPolitical EconomyInvestigationsLifestyleAdviceCarolyn HaxFoodHome & GardenStyleTravelWeddingsWellnessMagazineKidsPostTop Blogs

Arts PostAll We Can EatReliable Source | Roxanne Roberts & Amy ArgetsingerOn Parenting | Janice D’ArcyEntertainmentBooksCelebritiesComicsGoing Out GuideHoroscopesMoviesMuseumsPuzzlesTheater & DanceTVTop Blogs

TV Column | Lisa de MoraesCelebritology | Jen ChaneyClick Track | Chris Richards & David MalitzComic Riffs | Michael CavnaMultimediaInnovationsPhotosVideosThe Washington PostBloombergThe Washington PostEconomyIndustriesLocal BusinessMarketsPolicy&RegulationTechnologyWorldBusinessBlogs & ColumnsInnovationsOn Small BusinessIn the NewsDetroit auto show Mortgage rates Acura ILX Microsoft Apple mini-stores Google social search ???initialComments:true! pubdate:01/13/2012 17:19 EST! commentPeriod:14! commentEndDate:1/27/12 5:19 EST! currentDate:1/14/12 8:0 EST! allowComments:true! displayComments:true!

Romney and the ‘Bain way’

Correcting the King Memorial mistake

JoePa’s first interview since scandal

Your beautiful sunset photos

Standard & Poor’s cuts credit ratings for France and eight other European nations

View Photo Gallery — Which countries are faring the best?:?As Europe’s debt crisis slogs on, here’s a look at the credit ratings of the countries in the 17-nation euro zone. These assessments are made by Standard & Poor’s Ratings Service as of Dec. 29, 2011.

Text SizePrintE-mailReprints By Howard Schneider and Edward Cody,

Standard & Poor’s downgraded the credit ratings of France and eight other European nations Friday, further weakening the region’s finances and potentially raising costs for governments at a time when they already face a debt crisis.

The downgrade robs France of its prized AAA rating, despite vows by the French government to defend its pristine standing through recent measures to cut spending and raise taxes.

Comments

Weigh InCorrections?

Gallery

Worst-case scenarios:?What would happen if Greece, Spain or Italy were to default? Deutsche Bank, RBS and other investment research firms have released reports detailing the domino effect of a collapse of a single country in the euro zone. Here’s the doomsday scenario.

Gallery

?Leaders aim to hammer out a plan to save the euro, while demonstrators take to the streets to show opposition to austerity measures in cash-strapped countries.

President Nicolas Sarkozy’s failure to win that battle could bode ill for the entire 17-nation euro zone — as well as for his own chances in an upcoming election.

The downgrades will likely increase borrowing costs for the affected governments as they try to raise hundreds of billions of dollars on international bond markets this year. France alone needs to borrow about $240 billion to finance its existing debts and annual deficit. Italy and Spain, two large nations that are facing escalating debt problems, were also among the countries downgraded.

The S&P actions could also undermine the effectiveness of the region’s bailout fund, which European leaders have been counting on to help ailing countries such as Greece and stem the crisis from spreading onward to Italy and Spain. The bailout fund’s AAA rating, and its ability to raise money cheaply, depends in part on the credit standing of France, the euro zone’s second largest economy.

S&P did not mention the fund, the European Financial Stability Facility, in Friday’s ratings note, but said an evaluation of other European institutions, including banks and “government-related entities,” would be issued “in due course.”

The S&P action left intact the AAA rating of Germany, which is the region’s largest economy, as well as those of Finland, the Netherlands and Luxembourg.

Another top-rated country, Austria, lost its AAA rating. The ratings of Portugal, Cyprus, Malta, Slovakia and Slovenia also were downgraded.

The ratings agency said its actions were based on concerns about weak economic conditions in the euro zone, coupled with what it judged as the “insufficient” steps taken by European leaders to address the situation.

Despite a plethora of summits, declarations and bailout deals, Europe has “not produced a breakthrough of sufficient size and scope to fully address the euro zone’s financial problems,” the ratings agency concluded. Political leaders, the agency contended, did not even fully appreciate the scope of a crisis that extends far beyond overspending in small countries like Greece to encompass the competitiveness of the euro zone itself.

The downgrade of France by one notch brings its rating to the same level as that of the United States, which was stripped of its AAA rating by S&P in August amid concerns over Washington’s handling of the federal debt.

The French downgrade highlights the growing divide between European countries such as Germany that still enjoy rock-solid faith on international markets and those whose finances are more questionable.

At the extreme, Greece, Portugal and Ireland have already required international help. The fight now is to prevent large nations like Italy and Spain from being engulfed in a crisis that U.S. officials consider a chief risk to the global economy.

Continued12Next Page

EmailTumblrRedditStumbleuponDiggDeliciousWeigh InDiscussion PolicyAbout Discussions, Badges Newest firstOldest firstMost Recommended first SuperFan Badge

SuperFan badge holders consistently post smart, timely comments about Washington area sports and teams.