Saturday Jun 09, 201204:12 AM GMT
Moody's warns of broader eurozone downgrades
Sat Jun 9, 2012 3:57AM
Share | Email | Print
Moody's has warned that a Greek exit from the eurozone can lead to downgrades of the eurozone's top-rated countries, including Europe's biggest economy, Germany.


"Greece's exit from the euro would lead to substantial losses for investors in Greek securities, both directly as a result of the redenomination and indirectly as a result of the severe macroeconomic dislocation that would likely follow," said Moody's on Friday, AFP reported.

"Should Greece leave the euro, posing a threat to the euro's continued existence, Moody's would review all euro area sovereign ratings, including those of the AAA nations," the credit rating agency said.

Moody's puts eurozone countries Austria, France, Germany, Finland, Luxembourg, and Netherlands under triple-A category.

Greece is the epicenter of the eurozone debt crisis. It is headed for the second parliamentary elections, expected on June 17, following a political impasse since May 6 elections, when no party gained enough seats to form a government and efforts to create a coalition government ended in failure.

There are worries that more delays in resolving the eurozone debt crisis could push not just Europe but much of the rest of the developed world back into recession.

In addition, Moody's said that a European rescue effort of Spain's banking sector could force the agency to cut Spain's sovereign rating due to the "increased risk to the country's creditors."

The Spanish rescue plan could happen on Saturday to the tune of 40 billion euros (50 billion dollars).

Moody's rate Spain under A3 category with a negative outlook, which means the country risks a downgrade if economic conditions deteriorate considerably.

Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking with it millions of jobs.

The worsening eurozone debt crisis increased Spain's financing costs and raised concerns that the country might have to finally seek a European Union bailout, like Greece.

GJH/JR
Comments
Add Comment Click Here
Latest From Europe
  • Today
  • Last Week
  • Last Month
  • Today
  • Last Week
  • Last Month
Follow Us
© Copyright 2012 Press TV. All rights reserved. | About PressTV | Contact Us | Frequencies | Privacy Policy