Moody’s set to review EU members in first quarter

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Moody’s said yesterday it will review the credit ratings of all EU countries in the first quarter of next year, commenting that an EU summit last week failed to deliver “decisive policy measures”.

Fellow ratings agency Standard and Poor’s had already announced that it is considering downgrading the debt of 15 of the 17 eurozone countries, including the bloc’s Triple-A-rated champions like France and Germany.

“The absence of measures to stabilize credit markets over the short term means that the euro area, and the wider EU, remain prone to further shocks and the cohesion of the euro area under continued threat,” Moody’s said.

“In view of the continued absence of decisive policy measures despite the recent euro area summit, Moody’s Investors Service reiterates its intention to revisit the ratings of all EU sovereigns during the first quarter of 2012.”

Asian markets had risen in earlier trade on Monday as investors cautiously welcomed last week’s agreement by 26 of the 27 EU members to introduce tougher fiscal rules in a bid to save the eurozone.
Moody’s said last week’s hard-fought early morning announcement by EU policy makers offered “few new measures”, suggesting that it expects more trouble on the bond markets for Europe’s sovereign debtors

“The announced measures therefore do not change Moody’s previously expressed view that the crisis is in a critical and volatile stage, with sovereign and bank debt markets prone to acute dislocation which policy makers will find increasingly hard to contain,” the statement said.