Moody’s puts European Union on notice

Moody’s put the European Union on notice Monday that its top-notch Aaa rating is at risk of downgrade, cutting the outlook on the EU’s creditworthiness to “negative” from “stable” because of the continent’s ongoing debt crisis.

The move follows a similar action in July, when Moody’s revised to negative the outlooks on Aaa-rated Germany and the Netherlands. The outlooks of France and the U.K. had previously been revised to negative.

 The four countries account for about 45% of the EU’s budget revenue.

“The creditworthiness of these member states is highly correlated, as they are all exposed, albeit to varying degrees, to the euro area debt crisis,” Moody’s stated.

Moody’s said it lowered the EU’s outlook because it believed that the countries likely would not “prioritize the commitment to backstop the EU debt obligations over servicing their own debt obligations.”

Via CNN

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.