The Euro crisis receives another blow: S&P re-evaluates the rankings of European countries – Part 1

The Eurozone is attracting opprobrium from every side. On the top, public is raising questions on the economic prosperity of the region, the sides are being attacked by the shortfall of internal consumption and Euro is losing its value at the bottom. However, the Euro countries have recently been attacked at the front by Standard and Poor (S&P) with renewed ratings of the countries ranging from AAA to B-.

France, to everyone’s surprise, was targeted most harshly. The country’s rating at S&P dropped one point in the re-evaluation conducted in December, 2011. France received a rating of AA+ down from the AAA rating it has been sporting for that last one decade, even in the midst of 2008 crisis.

However, France was not the only country which received a negative response from the S&P. THe likes of Italy, Spain, Greece and Cyprus all received rankings down from their previous status. The main reason, as described by S&P in their latest announcement, was the inefficient measures taken to remedy the Euro Debt Crisis.

According to S&P, the European leadership is still denying to disclose the real problem that not only affected the Eurozone countries but also China and other East Asian countries, with the likes of Japan, Thailand and South Korea.

The European Union’s December meeting, in which the future instruments to eradicate and control the Euro crisis were to be discussed, did not result in a unanimous or reasonable decision. The measures that were discussed and reached to an agreement did not bear fruit and are insufficient for the area to get out of the economic ordeal.

The points were:

“The policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone. In our view, these stresses include: (1) tightening credit conditions, (2) an increase in risk premiums for a widening group of eurozone issuers, (3) a simultaneous attempt to delever by governments and households, (4) weakening economic growth prospects, and (5) an open and prolonged dispute among European policymakers over the proper approach to address challenges.”

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Posted by Usman Khalid on Jan 14 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.