Fitch Goes on a Downgrade Spree, 5 EU Nations Hit
- Posted on January 27, 2012 at 3:49pm by
Becket Adams
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U.S. ratings agency Fitch has downgraded the credit ratings for five European nations including leading economic heavyweights Italy and Spain.
The agency on Friday lowered credit ratings for the five nations by one notch and placed a negative outlook on all of them, as well as on Ireland. Those nations downgraded included Belgium, Cyprus, Italy, Slovenia and Spain.
Italy went down to A- credit rating while Spain was downgraded to A. Ireland’s BBB+ rating was affirmed but it also received a negative outlook.
- Belgium: AA+ to AA
- Spain: AA- to A
- Italy: A+ to A-
- Cyprus: BBB to BBB-
- Slovenia: AA- to A
Fitch Ratings blamed the revisions on “the marked deterioration in the economic outlook” in Europe and “the absence of a credible financial firewall against contagion and self-fulfilling liquidity crises.
It said that European leaders “gradualist” approach to tackling the crisis meant that Europe will continue to face episodes of severe financial volatility that would erode government’s ability to repay debt.
European leaders have been criticized for moving too slowly in tackling the crisis, which started in October 2009 when Greece admitted it was in deep financial trouble. Led by Germany, the eurozone’s largest member, governments have resisted sweeping solutions such as pooling their borrowing power in so-called eurobonds and have balked at increasing the financing of their bailout funds from €500 billion. Efforts have focused instead on making bailed-out countries try to cut spending and reduce their budget deficits. The 17 members have also agreed to come up with a treaty requiring national laws to limit deficits.
At the World Economic Forum gathering in Davos this week, leading European finance chiefs have sought to reassure anxious global business leaders that Europe is on track to solve its debt crisis.
Fitch said the eurozone’s difficulties would be compounded by a shrinking economy, now that many economists expect at least a mild recession.
Judging by the wording of the Fitch report, the agency doesn’t seem to have a lot of faith in the EU to resolve its financial issues (via Business Insider):
In Fitch’s opinion, the eurozone crisis will only be resolved as and when there is broad economic recovery. It is evident that further substantial reforms of the governance of the eurozone will be required to secure economic and financial stability, including greater fiscal integration.
However, as BI notes, perhaps these downgrades shouldn’t come as a huge shock, especially “after S&P cut the long-term issuer ratings of nine eurozone countries two weeks ago.”
Read the Full Fitch Release Here.
The Associated Press contributed to this report.
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lukerw
Posted on January 28, 2012 at 12:20pmBelgium… should include Luxembourg… as it is the same Currency! So, it is a 6 Nation down grade… including all the Banks in the Grand Duche!
Report Post »dianna9490
Posted on January 28, 2012 at 8:06amAmericans need to be informed: Do you realize how much newly printed money that OBUMMER HAS LOANED TO THE EU BANKS? If their banks go under then our economy goes under – this is all George Soros plan and OBUMMER does what he says! And now our govern is giving OBUMMER 1.2 Trillion more dollars – SIMPLY RIDICULOUS! Soros is setting America up thru OBUMMER TO FAIL so HE CAN MAKE BILLIONS! SICKENING!
Report Post »chicago76
Posted on January 28, 2012 at 5:32amAnyone here the interview of George Soros about Romney and Obama. It is worth listening to if you think Romney is the answer.
Report Post »ForTheRepublic
Posted on January 27, 2012 at 10:29pm* Belgium: A+ to A
Report Post »* Spain: A- to B
* Italy: A+ to A-
* Cyprus: B to B-
* Slovenia: A- to B
John Kettlewell
Posted on January 27, 2012 at 9:52pmIt’s French…and it ignored France.
Report Post »Winkycat
Posted on January 27, 2012 at 8:59pmWhen the EU is cut the United States bleeds. There are too many US commercial banks that hold bad EU loans and there are as many investment firms that have invested in the EU. When the EU collapses the US will be the first to feel it and if the current economic situation in the US does not improve (I doubt if it will) then our economy will also collapse. This will have a drastic effect on the Middle East as their customers buy less and less oil. It will play havoc on China‘s and India’s export driven economies whose major customer are the EU market and the US consumer. It will drag Japan who like the US has heavy investments in both markets, Russia, Taiwan, South Korea, are some other heavy weights whose economies will start tumbling.
Report Post »Bill Burns
Posted on January 27, 2012 at 7:24pmO insists George Bush did it.
Report Post »Netsurfer2
Posted on January 27, 2012 at 6:45pmInteresting how America bailed out other Euro Nations, when at the same time America was being bailed out by China! Reminds me of Carter, when T-Shirts said “The buck stops here!” while holding a gas pump and we had long lines for fuel stations with odd & even ration days! My only words to every American “Get Out of Debt and stay out of debt!” Otherwise the banks will own you because the dollar won‘t be worth anything and the interest will be so high that you won’t be able to pay it off ever!
Report Post »balrog25
Posted on January 27, 2012 at 6:21pmDid anyone notice in the Bond film “Quantum of Solace” that the evil financier’s group is called “Quantum” just like George Soros’ group. Oops, sorry. There’s no correlation at all! It’s just fiction! Please I didn’t mean it! Aaaarrrg.
Back to your lives subjects, nothing to see here.
Report Post »Dabldo
Posted on January 27, 2012 at 10:06pmPURELY COINCIDENCE! No names have been changed here to protect the evil…….
Report Post »wildchild6
Posted on January 27, 2012 at 5:57pmBuy ammo……….
Report Post »Komponist-ZAH
Posted on January 27, 2012 at 5:24pmBut the Eurocrats have the perfect solution to having their credit downgraded by those evil American ratings agencies: start their own!
Report Post »http://blogs.telegraph.co.uk/news/danielhannan/100133029/the-solution-to-the-euro-crisis-a-european-credit-rating-agency/
apu123
Posted on January 27, 2012 at 5:10pmThe market barely moved to the downside when this was mentioned and the talking heads on CNBCialis have been pitching the idea that a Greek default will be bullish and spur a huge relief rally. Every bit of bad news has been ignored. Want to know why? Because every broker/dealer bankster and other financial con-artist is expecting further LTRO from the ECB and QE3 from the fed to the tune of trillions.
Our GDP ex inventory stuffing for Christmas and government fluffed auto production was .5%, unemployment numbers have become a joke, revised up every week for the last 54 weeks, real estate is at its worst and we have more debt. What has changed since S&P 666 in March of 09? Nothing its worse but the market will rally while there is the rumor of all that cheap money produced by the FED and ECB.
Report Post »thegreatcarnac
Posted on January 27, 2012 at 5:01pmSimple fix…..send hit team after Fitch…he is ruining things. lol
Report Post »TRILO
Posted on January 27, 2012 at 4:56pmThey should have added the USA to that list of downgrades. Every man, woman and child in this country now owes more than $52400 to pay off our newly increased debt limit of $16+ Trillion. Wonder what it is if you add the unfunded liabilities to that total? I am so glad that the Republicans gave BHO the ability to increase the debt ceiling during the debt “crisis” last year. Their last two phony votes against the debt increases only works for the sheeple. Their provision on the Keystone deal worked out real well too!! Both parties are the same on government spending… keep spending as long as the Fed can keep printing and monetizing our debt.
I am so glad we have republican presidential candidates who are in the lead that want to solve this huge and dangerous situation. Yeh, right! If you believe that I have an orange grove to sell you in the Mojave desert.
Report Post »tgthompson
Posted on January 27, 2012 at 4:49pmThe World Bank revised GDP growth estimates for 2012 downward very sharply, warned that Europe could be on the verge of a devastating financial crisis, and declared that the rest of the world better “prepare for the worst.”
Report Post »rukdnme13
Posted on January 27, 2012 at 4:39pmThe U.S. for no reason should borrow another cent from China, for ourselves or to loan to any other foreign nation. The American economy has been ravaged for 100 years through inflation created by a cartel, known as the Federal Reserve!!!!!
Report Post »chips1
Posted on January 27, 2012 at 4:30pmThe more they downgrade, the more equal we are. Those of us that actually work for a living, will get it all back. That’s how stupid liberals are.
Report Post »EchoHawk
Posted on January 27, 2012 at 4:43pmI recommend less exposure of sunshine to your starfish, you’re going to get a sunburn.
Report Post »JohnQTaxpayer
Posted on January 27, 2012 at 4:18pmComing soon to a rating agency sometime soon
USA rating changed from AA+ to INSANE
You have to be Insane to loan them anything but insults for being stupid spendthrifts
16 trillion dollars, is criminal
Report Post »AvengerK
Posted on January 27, 2012 at 4:26pmI’ll keep saying it….The Euro will tank. Greece WILL default. The Euro will not be the same by the end of this year. Likely the EU will be a smaller member union not as likely..but still possible…the Euro will be dropped for a return to old currencies. Europe is also looking at a combined negative GDP signalling another recession. Europe is collapsing under the weight of it‘s own socialism and the complacency it breeds among it’s populations. The U.S. can only weather this with stronger jobs numbers a situation that under Barack Obama is completely out of the question.
Report Post »Gonzo
Posted on January 27, 2012 at 4:32pmImagine what it will be with four more years of Obama? Oh I forgot, we’ll “tax the rich’ and that will solve everything. Carry on.
Report Post »liberal_equals_liar
Posted on January 27, 2012 at 5:00pmok, taking notes here…tax the rich then downgrade from AA + to “must eat worms to survive.”
jolly good.
buck ofama
Report Post »Darmok and Jalad at Tanagra
Posted on January 27, 2012 at 4:10pmWhy do we care what David Spader’s character from “Just Shoot Me” does, he is a receptionist for Pete’s sake.
Report Post »TheLeftMadeMeRight
Posted on January 27, 2012 at 4:09pmand the first guests are ariving now…..
Report Post »gspthebest
Posted on January 27, 2012 at 4:08pmSoros plan working perfectly. Prepre for the worst and hope for the best. Two is great – one is nothing.
Report Post »AvengerK
Posted on January 27, 2012 at 4:28pmSoros has bet on the wrong horse. He’s in for $2billion in Italian debt and he bought it through Corzine’s MF Global. This is why he’s lobbying so energetically for a bailout for the Euro. Germany needs the Euro, a return to the Deuschmark would raise the value of German currency around 20% and put a halt to the trade boom Germany’s enjoyed since adopting the Euro.
Report Post »