S&P strips France of AAA rating, lowers ratings for eight other EU nations; Italy down by two notches, Portugal to 'junk'

S&P strips France of AAA rating, lowers ratings for eight other EU nations; Italy down by two notches, Portugal to 'junk'

Standard & Poor’s has stripped France of its AAA credit rating, cut Portugal’s credit to junk status and downgraded Italy’s debt by two notches in a wholesale downgrade of European countries caught up in the European debt crisis.

France has gone from its prized AAA rating to AA+. Austria had an identical fate. (S&P has previously downgraded the US in a similar manner. For comparison, Australia has a AAA rating, 'stable'. New Zealand had its rating cut by S&P in September 2011 from AA+ to AA, with a 'stable' outlook.)

Germany retains its AAA rating. While Finland, the Netherlands and Luxembourg kept their AAA ratings, they were put on negative watch.

S&P also cut the ratings of Italy, Spain and Portugal by two notches.

Italy has gone from A to BBB+.  Spain has gone from AA- to A.  Portugal has fallen below investment grade, going from BBB- to BB.

All changes happened at 9pm Brussels time, after markets had closed in both Europe and the US. Few European governments were happy - all aimed salvos at S&P for these changes.

The full list of changes today are ...

Country Old rating New rating Outlook
  Click here for an explanation of credit ratings
Austria AAA AA+ Negative
Belgium AA AA Negative
Cyprus   BBB       BB+   Negative
Estonia AA- AA- Negative
Finland AAA AAA Negative
France AAA AA+ Negative
Germany AAA AAA Stable
Greece    CC         CC     Negative
Ireland BBB+ BBB+ Negative
Italy A BBB+ Negative
Luxembourg AAA AAA Negative
Malta A A- Negative
Netherlands AAA AAA Negative
Portugal BBB-     BB     Negative
Slovakia A+ A Stable
Slovenia AA- A+ Negative
Spain AA- A Negative
 'Junk' grade      

The outlook for all countries is 'negative', except for Germany and Slovakia where the outlook is 'stable'. 

There is speculation now that the new European rescue fund, the European Financial Stability Facility, which is designed to prevent the contagion from spreading to large countries like Italy and Spain, would likely see its borrowing costs rise. It too may be downgraded.

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Oh well – the path a few predicted here for 2012 is just happening - enjoy summer.

This is really quite funny...the UK has held on to its AAA rating while France has been kicked in the goolies...anyone for an early British general election!
Bye bye Sarkozy.....
Why has it taken S&P so long!
Should be a lively time for the piigs bonds come the start of trade. Wonder how much extra the debt mountain is set to cost to finance. Oh did I leave out France...

The UK has options....the first of which its trying to distance itself from the EU mess.....im not sure it will....
Didnt france have 50billion in bonds due?
I expect there wlll be moves soon to kneecap S&P etc....as they are "damaging" the Eu economy.....

The Brits have proven once again , the benefit of not doing deals with the Germans . And the French have forgotten their history , more the fool them .
..... but hey , what a daft idea to downgrade a country , to cause it's interest rates to rise , just when it's struggling and needs the opposite ,  lower interest rates .....

You have to think..so what?. The US got downgraded, we got downgraded. Hey we are still borrowing money, (and plenty of it) selling bonds, and our $ is sky high.
Welcome to the club France and friends.  Having a downgrade is actually the new cool!


The ratings agencies are owned by their greed and political dogma, so fundimentally un-trustworthy....waste of space....more fool the person who pays them any attention.