Posted on 12/16/2011 5:53:56 PM PST by bruinbirdman
Spain and Italy were both told to brace for a debt downgrade after a leading rating agency concluded that a "comprehensive solution to the eurozone crisis is technically and politically beyond reach".
The eurozone’s third- and fourth-biggest economies were warned by Fitch of a “near-term” downgrade, alongside Ireland, Belgium, Slovenia and Cyprus.
In a further blow, Belgium separately saw its credit rating downgraded two notches, to Aa3, by another leading agency, Moody’s.
It cited the “sustained deterioration” in funding conditions for eurozone countries with relatively high levels of public debt, like Belgium, and new risks stemming from the country's troubled banking sector.
The downgrade and warnings, delivered after the markets closed last night, came as Spain said its debts had soared; talks with Greece’s private bondholders stalled; and Hungary broke off talks with the International Monetary Fund (IMF).
Pitching itself firmly against Germany, the rating agency warned that the European Central Bank (ECB) needed to give a "more active and explicit commitment" to prevent "self-fulfilling liquidity crises" ripping through the eurozone. The ECB's support for eurozone banks was praised but Fitch said the central bank's "continued reluctance to countenance a similar degree of support to its sovereign shareholders" was undermining the efforts to create a firewall to stem the crisis.
As a result the "crisis will persist and likely be punctuated by episodes of severe financial volatility" which threatened these six countries in particular because of their high levels of public debt.
Fitch's warning came as another ratings agency - Moody's - downgraded Belgium's credit rating by two notches to Aa3 from Aa1 late on Friday.
The ratings agency cited tough eurozone funding conditions and further woes from its dismantling of troubled bank Dexia and
Belgian government's total exposures to the group will likely rise and,
(Excerpt) Read more at telegraph.co.uk ...
Kinda amazin’ that things unravel so quickly. Where were the ratings agencies a few years ago?
A few years ago America had a brilliant, visionary, uniquely talented, pragmatic, post-partisan, unifying President who was the one we had all been waiting for.
I'm not exactly sure what became of all that.
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