December 6, 2011
European Union leaders reacted angrily Tuesday over the timing of a warning of a broad credit rating downgrade days before a European summit meeting. And German officials portrayed the threat by Standard & Poor’s as impetus for leaders to make a deal to rescue the euro.
Late Monday, S.& P. warned that the ratings of 15 euro zone countries, including Germany and France, were vulnerable to a downgrade. On Tuesday, the agency extended its threat of a possible downgrade to include the top-notch, long-term credit rating on the European Union’s main bailout fund, if any of its gilt-edged guarantors were downgraded.
Though rating agencies have made announcements before previous meetings on the euro debt crisis, Monday’s warning was striking. Market indexes in the euro zone closed down Tuesday, while the yields on German and French bonds rose, a sign of added risk to holders of the securities.
The European commissioner responsible for financial market regulation, Michel Barnier, complained that S.& P. had acted without waiting to evaluate the results of the coming two-day summit meeting in Brussels.
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