Debt crisis: all 17 eurozone countries face losing AAA credit status
European leaders have been threatened with a downgrade in their credit ratings if a Franco-German plan to resolve the eurozone debt crisis does not soon show progress. Standard and Poors, a credit-rating agency, said all 17 eurozone members, including France and even Germany, could lose their AAA ratings without speedy action to resolve the crisis. A downgrade would effectively scupper the euro rescue because the EU bail-out fund would no longer be able to raise money on bond markets. According to a leaked report, S+P has told eurozone countries including Germany, France, the Netherlands, Austria, Finland, and Luxembourg that they could be downgraded because of the failure of leaders to resolve the debt crisis. The lack of progress the European policy-makers have so far made in controlling the spread of the financial crisis may reflect structural weaknesses in the decision-making process within the eurozone and European Union, the agency is said to have told them. The warning overshadowed the latest Franco-German attempt to agree a treaty creating a fiscal union in the eurozone. Angela Merkel and Nicolas Sarkozy yesterday warned David Cameron that they will push ahead with their new treaty whether or not Britain signs up. The challenge came as Mr Cameron hit back at Iain Duncan Smith and other Tory eurosceptics who have suggested that any change in EU rules should be put to the British people in a referendum. Mrs Merkel and Mr Sarkozy met yesterday in Paris to discuss a new European treaty to create a golden rule of balanced budgets for eurozone states. Members would face automatic sanctions for large deficits. Financial markets rose after the meeting as traders calculated that the plan would protect indebted countries such as Italy and Greece. The rally came even though Germany backed away from plans (Excerpt) Read more at telegraph.co. uk …
