News / Economy

EU Leaders Angry About Credit Downgrade

In this photo taken with a fisheye lens, flames from a fire set alight in a container by activists of the Frankfurt Occupy movement are seen in front of the European Central Bank and a sculpture of the euro symbol in Frankfurt, Germany, November 21, 2011
In this photo taken with a fisheye lens, flames from a fire set alight in a container by activists of the Frankfurt Occupy movement are seen in front of the European Central Bank and a sculpture of the euro symbol in Frankfurt, Germany, November 21, 2011

Multimedia

Audio
Lisa Bryant

European leaders hit back Saturday at the downgrade by Standard & Poor's of the credit ratings of nine European nations, calling the move unfounded and inconsistent.

From Larnaka to Brussels, European Union officials were on the defensive Saturday, downplaying the downgrades while vowing to push through fiscal reforms.

In a widely anticipated move, the rating agency downgraded by a notch the ratings of five European countries, including the region's second-largest economy France. It downgraded four others - Italy, Portugal, Spain and Cyprus - by two notches.

The finance minister of Cyprus called the move "arbitrary and unfounded." The Austrian government also criticized the measure. European Economic and Monetary Commissioner Olli Rehn called the downgrades inconsistent.

Other politicians, like French Prime Minister Francois Fillon, sought to put a positive spin on the news.

At a press conference on Saturday, Baroin said that while S&P had downgraded France's once-sterling AAA to AA+, the agency had also confirmed the French economy was solid, diversified and resistant. It noted the government had implemented the necessary reforms and applied a credible strategy to reduce its debt and deficit.

Baroin also said a new fiscal discipline pact agreed to by European leaders last month showed they were proactive in addressing the eurozone crisis. In Germany, which retained its AAA rating, Chancellor Angela Merkel called on European leaders to move quickly to adopt the pact, which was spearheaded by France and Germany.

But S&P has criticized the European Union pact as an insufficient answer to the crisis, an assessment shared by analysts like Tomasz Michaelski of the HEC business school in Paris. Michaelski also doesn't believe the downgrades will prompt European leaders to take bolder steps when they meet at the end of January.

"I don't believe that there's going to be a general solution to the problem reached at a common European summit," said Michaelski.  "I don't believe that can happen. There are so many different interests. Each country is going to have to heal itself."

In practical terms, the downgrades mean that some countries may have to borrow money at higher costs. The EU's bailout fund may also be affected. But some analysts believe that since so many countries have been downgraded, including the United States last summer, it may have little tangible impact.

Still others, like Michaelski, say the markets may have anticipated the downgrade and may not react dramatically when they reopen on Monday.

Correction - Previously, French Finance Minister Francois Baroin was mistakely identified as Francois Filon

You May Like

IS Militants Release 49 Turkish Hostages

Turkey's state-run Anadolu news agency reports that no ransom was paid and no conditions accepted for the hostages' release; few details of the release are known More

Photogallery IS Attacks Send Thousands of Syrian Kurds Fleeing to Turkey

Syrian Observatory for Human Rights says more than 300 Kurdish fighters crossed into Syria from Turkey to defend a Kurdish area from attack by the Islamic militants More

Video Sierra Leone's Ebola Lockdown Continues

Thousands of health workers are going door to door in the West African country of 6 million, informing people of how to avoid Ebola, handing out soap More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Fears Ebola Outbreak ‘Beyond Our Capability to Contain’i
X
Jeff Seldin
September 20, 2014 10:28 PM
Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Fears Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7768
JPY
USD
108.84
GBP
USD
0.6124
CAD
USD
1.0999
INR
USD
61.042

Rates may not be current.