S&P puts 15 eurozone members on downgrade alert

Rating agency Standard & Poor’s (S&P) has put the long-term debt ratings of 15 countries within the eurozone “on CreditWatch with negative implications” over concerns of further turmoil in the markets.

In a statement the rating agency revealed that “systemic stresses in the eurozone have risen in recent weeks” and were now putting downward pressure “on the credit standing of the eurozone as a whole”.

Standard & Poor’s revealed there were five interrelated factors including: tightening credit conditions; “markedly higher risk premiums on a growing number of eurozone sovereigns”; “continuing disagreements among European policy makers on how to tackle the immediate market confidence crisis and, longer term, how to ensure greater economic, financial, and fiscal convergence among eurozone members”; high levels of government and household indebtedness; and the risk of economic recession in the eurozone next year.

It says it is assigning a 40% probability of a fall in output across the eurozone.

The rating agency is to conclude a review of the eurozone sovereign ratings as soon as possible over the European Union summit later this week.

Austria, Belgium, Finland, Germany, Netherlands, and Luxembourg could all see their ratings downgraded by one notch while the remaining affected countries could be downgraded by two notches.

The rating agency has maintained its negative status for Cyprus, while Greece was not placed on the list.

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