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Friday, 13 January 2012

Debt crisis: France facing credit rating downgrade as markets slide

Reports of an imminent downgrade by Standard & Poor's of several eurozone nations – including AAA-rated France – sees euro tumble, stock markets fall and eurozone borrowing costs spike.

The original of the article is in French "La France va être dégradée d'un cran par S & P" and not translated into English, but nevertheless here is the link:

Translated: The main global rating agency, Standard & Poor's, is about to break down the rating of sovereign debt of most countries in the euro area, including France.
According to our information, France is lowered a notch such as Austria, to AA +.Italy, Spain and Portugal, they would be degraded by two notches.Slovakia could also be affected by a one notch downgrade, according to Reuters. The Netherlands, Germany and Luxembourg would be spared. The news initially is refluxed into the red European equity markets , which finally ended, however, close to equilibrium (the CAC 40 losing only 0.11%).
Reportedly, the new will be released that night after the close of U.S. markets to 22:30 Paris time. Widely expected, has long been anticipated by investors, the news should have no negative impact had been December 5, 2011 announcement by the same agency placed under review with negative implications 15 of the 17 countries that account the euro area. Cyprus and Greece had escaped when the measure but only because the first was already on negative watch with negative implications and the second categorized as highly speculative.
Thus, the European club popular with Triple A, the highest rating possible, would lose two of its six members. Such as France, Austria would lose their status as advantageous. Governments prepared their publics for this eventuality. The fact remains that France's decision by Standard & Poor's will weigh all his weight on the presidential campaign. Citigroup economists believe that the second rating agency Global, Moody's is expected to quickly follow the example of Standard. However, Fitch Ratings announced that it would probably not degrade in France in 2012 , said William Meuret, an economist at Citigroup. Fitch of French origin, has the largest shareholder holding French e Fimalac.

Looks like dominoes are falling. 

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