December 15, 2011
More gloom descended on Europe as the euro sank below $1.30 for the first time since January, with further falls predicted, and leaders underlined how far apart they remain on a way out of the region's deepening debt crisis.
Expectations grew that France was preparing for an imminent downgrade by Standard & Poor's of its cherished triple-A rating as part of a review of euro-zone countries the company said it would undertake after last week's European Union summit.
In a comment some observers saw as preparing the ground, French Foreign Minister Alain Juppé shrugged off the impact of any downgrade. "It wouldn't be good news, of course, but it would not be cataclysmic either," he said in an interview with French newspaper Les Echos that was conducted Tuesday.
A French official said the government hasn't been informed of a ratings downgrade by S&P, but insisted there was no reason for investors to doubt France's ability to service its debt. S&P typically gives a government 12 hours notice ahead of a change in its ratings.
"You have a bunch of senior officials talking as if it's a done deal," said Steven Englander, head of G-10 strategy at Citigroup in New York. He said it isn't just a possible French downgrade, but other triple-A countries as well, such as Austria. "It looks like they're using expectations management."
More
No comments:
Post a Comment