Downgrade Threat Irks Governments

Wall Street Journal
December 7, 2011

The threat of a collective downgrade of euro-zone nations' credit ratings damped the market enthusiasm that had greeted the announcement a day earlier by France and Germany of plans for a solution to the debt crisis.

Reactions in Europe's capitals ranged from stoicism to outrage as Standard & Poor's put 15 of the 17 euro-zone nations on credit watch for a possible downgrade Monday, days before a crucial meeting of euro-zone leaders that has been billed by some as a "last chance to save the euro."

On Tuesday, S&P put the long-term rating of the euro-zone bailout fund, the European Financial Stability Facility, on credit watch negative. S&P said it could downgrade the EFSF by one or two notches depending on the outcome of its review of the members' sovereigns.

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