Credit rating agency, Standard & Poor's has announced its decision to downgrade several Euro zone countries on Friday including France.
The decision to downgrade France's credit worthiness to AA+ results in only Germany being a large Euro nation struggling to control the group’s crisis. France was the only country with the highest ranking to backing expansionary policies during the crisis.
Germany, which proposes budget cuts and tax increases as a way to address the crisis, will now find it easier to have its way in Europe. S&P advises against such measures as it believes that they might becoming self-defeating for the region.
Luxembourg, Finland or the Netherlands are the other three countries with the top ranking but their influence and contributions to initiatives to resolve the crisis is incomparable to that of Germany.
The agency took the top-grade AAA ratings away from France and Austria adding significantly to the concerns in the region. The agency did not change the rating for the regions largest economy, Germany. The agency downgraded its rating for nine out of the 17 Euro Zone countries. S&P downgraded the rating for France and four other countries by one notch while Portugal, Italy, Spain and Cyprus saw their rating downgraded by two notches.
S&P said that the rating on seven other euro zone countries remains the same. It also said that after reviewing 16 countries, it has found that all but Germany and Slovakia have negative outlooks in the region.
“Today’s rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policy makers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,” S&P said.
European politicians has criticized S.& P.’s downgrade saying that the agency has not provided any information to investors but has simple increased concerns over the crisis.
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