23 July 2012

Moody's changes the outlook of eurozone core countries

All four sovereigns are adversely affected by the following two euro-area-wide developments:

1. the rising uncertainty regarding the outcome of the euro area debt crisis given the current policy framework, and the increased susceptibility to event risk stemming from the increased likelihood of Greece's exit from the euro area, including the broader impact that such an event would have on euro area members, particularly Spain and Italy.
2. Even if such an event is avoided, there is an increasing likelihood that greater collective support for other euro area sovereigns, most notably Spain and Italy, will be required. Given the greater ability to absorb the costs associated with this support, this burden will likely fall most heavily on more highly rated Member States if the euro area is to be preserved in its current form.

These increased risks, in combination with the country-specific considerations..., have prompted the changes in the rating outlooks of Germany, the Netherlands and Luxembourg. In contrast, Finland's unique credit profile... remains consistent with a stable rating outlook.

Press release

In a statement on 24.7.12, the President of the Eurogroup said:

We take note of the rating decision of Moody's which confirms the very strong rating enjoyed by a number of euro area Member States, as supported by the sound fundamentals which these and other euro area countries continue to enjoy. Against this background, we reiterate our strong commitment to ensure 

the stability of the euro area as a whole. 

© Moody's