Friday 13 means in many countries bad luck. France, Austria and seven other countries in Europe are probably agreeing with that now as yesterday, January the 13, the US based ratings agency Standard & Poor’s cut France and Austria triple -A rating by one notch to AA+, and downgraded the other seven countries -Spain, Italy, Portugal, Malta, Cyprus, Slovakia and Slovenia two notches.
In a statement the agency said the EU draft fiscal compact “does not supply sufficient additional resources or operational flexibility to bolster European rescue operations. “ It also noted that “a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues.” This has obviously created some concerns coming just two weeks before 26 EU countries aim to sign the new treaty at a summit in Brussels. The downgrading of Spain and Italy will reopen speculation that they will need to be bailed out, while the rating for Portugal reduces its debt to junk status. And among all of this talks on a deal to restructure Greece’s unsustainable public debt burden broke down. Not a safe way for the euro-zone to begin the year.
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