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Worries over France's AAA rating outlook

Worries continue about a possible negative rating outlook for France – but European stocks are on the rise again after S&P announces that it won’t downgrade the United States’ credit rating.
Nov 22nd 2011, 9:45 AM 766 0

US CREDIT RATING agency Moody’s says France faces a threat to its credit outlook due to a slow-down of growth – but added that the country’s rating was not yet under threat.

European stocks plunged yesterday, closing on six-week lows, following Moody’s assessment of one of the eurozone’s largest economies – and France vowed to do whatever necessary to protect its AAA rating.

France currently holds the top rating with all three major agencies, although Moody’s has warned that it will place the country on negative outlook if the costs of bailing out French and eurozone banks prove too great, reports Deutsche Welle.

However, in good news, European stocks rose again today after Standard and Poor’s announced that it was not considering lowering the United State’s rating. The announcement came despite the failure of the supercommittee set up by Congress to find $1.5 trillion in deficit cuts to reach an agreement yesterday.

According to the Washington Post, S&P said that the failure to reach a decision did not merit a further downgrade and would keep its US rating at AA+, after knocking it down from AAA at the beginning of August. The US retains a top rating with Moody’s and Fitch.

Read: Massive spending cuts likely after US ‘super-committee’ collapses without deal>

Read: Concern for France’s AAA rating as 10-year bond yields rise>

Read: Moody’s downgrades Spain’s credit rating>

Read: Moody’s warns on France’s credit rating>

Read: Spain’s credit rating downgraded by Standard and Poor’s>

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Jennifer Wade

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