Wall Street Journal
May 24, 2011
The European debt crisis loomed larger again Tuesday as officials worried that financial markets could thwart efforts to get countries such as Greece back on even fiscal footing.
Moody's Investors Service added to those concerns, warning Tuesday that a Greek debt restructuring could affect the credit ratings of other European governments and would probably also lead to rating downgrades for Greek banks.
"The full impact on Europe's capital markets would be hard to predict and harder still to control. The fallout would have implications for the creditworthiness (and hence the ratings) of issuers across Europe," the Moody's report said.
European Council President Herman van Rompuy acknowledged in a speech in Paris on Tuesday that Greece is having trouble adjusting in a hostile market.
"They don't give Greece time to adjust, and that's a pity," he said. Even so, Greece has to press on with spending cuts, he said. "If there is a slippage they have to correct as soon as possible."
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