Standard & Poor’s (S&P) has placed the AAA rating of the European Union (EU) on “CreditWatch with negative implications” after issuing a similar warning to 15 eurozone states.
The agency made the move after pointing out that the credit ratings of 17 EU members now have a negative outlook and warned that the region could be cut by one notch if one or more AAA countries are downgraded.
The group points out that 62% of the EU’s total 2011 budgeted revenues come from eurozone members, with Germany and France alone contributing 16% and 14% respectively.
In addition, AAA-rated nations contribute about 49% of EU revenues. The UK, Denmark and Sweden are the only AAA countries in the union to have a stable outlook.
A statement by the agency says: “The CreditWatch on the EU is an expression of our concerns about the potential impact on the future debt service capacity of eurozone sovereigns, and therefore also the EU, in the context of what we view as deepening political, financial, and monetary problems within the eurozone.”
The review of the ratings of the 15 eurozone members is expected to be completed “as soon as possible” after the European summit on December 8 and 9. The review of the EU will be resolved after this.
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