News / Europe

    S&P Threatens Downgrade for Europe Bailout Fund

    The map of Europe is featured on the face of a two Euro coin seen in this photo illustration taken in Rome, December 3, 2011.
    The map of Europe is featured on the face of a two Euro coin seen in this photo illustration taken in Rome, December 3, 2011.

    The credit agency Standard & Poor's is now threatening to downgrade the top rating of the bailout fund for Europe's debt-ridden countries.

    S&P issued the warning Tuesday, a day after it placed 15 of the 17 nations that use the euro, including economic powerhouses Germany and France, on a negative credit watch.

    The credit agency said it would decide within 90 days whether to cut the AAA credit rating for the bailout agency by one or two notches after determining whether the credit standing of any of the individual countries should be trimmed.

    A debt analyst for S&P, Moritz Kraemer, said at a Frankfurt news conference that it issued the warnings because European officials have made "a very slow and reluctant response" to the continent's debt crisis. He expressed skepticism that European leaders would act at a summit later this week to resolve the two-year debt contagion.

    Kraemer said the effects of the debt crisis have spread through the continent and could worsen.

    "Well, it's our opinion that the financial crisis that we are witnessing in the eurozone is no longer a crisis of individual countries on the periphery. We think it has taken a more systemic trajectory. It has been spreading into some core countries and also financial institutions in the core countries," Kraemer said. "It has deepened on the periphery. So we think that the current situation has the potential to destabilize further."

    If the credit rating for the $591 billion bailout fund is cut, it would boost the borrowing costs to assist debt-ridden countries. Greece, Ireland and Portugal have already needed international assistance and analysts fear that Italy and Spain, with the continent's third and fourth largest economies, also might need help.

    U.S.Treasury Secretary Timothy Geithner (L) leaves the headquarters of the European Central Bank (ECB) in Frankfurt, December 6, 2011
    U.S.Treasury Secretary Timothy Geithner (L) leaves the headquarters of the European Central Bank (ECB) in Frankfurt, December 6, 2011

    U.S. Treasury Secretary Timothy Geithner traveled to Europe Tuesday to prod the continent's leaders to take decisive action. He said the U.S. is encouraged that European leaders are taking steps to alleviate the crisis, while acknowledging that American policy makers face their own economic challenges.

    Geithner is meeting with German Chancellor Angela Merkel and European Central Bank President Mario Draghi to warn that further delays could imperil the world economy, including the sluggish recovery in the American economy, the world's largest.

    Ms. Merkel and French President Nicolas Sarkozy unveiled a plan Monday for tighter controls over the spending of individual governments. They called for changes to the treaty governing the 27-nation European Union, or at least covering budgets in the 17-nation eurozone.

    European officials criticized the S&P threat of a downgrade, saying it ignored new efforts to resolve the crisis and the plans for unified action at the Brussels summit Thursday and Friday.

    Ms. Merkel vowed that Europe would act and downplayed the significance of the possibility of an S&P ratings cut.

    "What a rating agency does is the responsibility of the rating agency. On Thursday and Friday we will make the decisions which we think are important and indispensable for the eurozone and therefore contribute to the stabilization of the eurozone," Merkel said. "I also think we will regain confidence. I have always said this is a long process and it will continue for some time, but we charted the course yesterday with the French president and we will continue to stay the course."

    All 27 EU nations would have to approve changes to the 1992 Maastricht Treaty that created the EU, but broad approval would not be necessary if spending controls apply only to the eurozone.

    Some information for this report was provided by AP and AFP.

    You May Like

    How Aleppo Rebels Plan to Withstand Assad's Siege

    Rebels in Aleppo are laying plans to withstand a siege by Syrian President Bashar al-Assad’s forces in likelihood the regime cuts a final main supply line running west of city

    Probe Targeting China's Statistic Head Sparks Concern

    Economists now asking what prompted government to launch an investigation only months after Wang Baoan had been vetted for crucial job

    HRW: Both Sides in Ukraine Conflict Targeted, Used Schools

    Rights group documents how both sides in Ukraine conflict carried out attacks on schools and used them for military purposes

    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.
    Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growthi
    X
    February 10, 2016 5:54 AM
    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growth

    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Civil Rights Pioneer Remembers Struggle for Voting Rights

    February is Black History Month in the United States. The annual, month-long national observance pays tribute to important people and events that shaped the history of African Americans. VOA's Chris Simkins reports how one man fought against discrimination to help millions of blacks obtain the right to vote
    Video

    Video Jordanian Theater Group Stages Anti-Terrorism Message

    The lure of the self-styled “Islamic State” has many parents worried about their children who may be susceptible to the organization’s online propaganda. Dozens of Muslim communities in the Middle East are fighting back -- giving young adults alternatives to violence. One group in Jordan is using dramatic expression a send a family message. Mideast Broadcasting Network correspondent Haider Al Abdali shared this report with VOA. It’s narrated by Bronwyn Benito
    Video

    Video Migrant Crisis Fuels Debate Over Britain’s Future in EU

    The migrant crisis in Europe is fueling the debate in Britain ahead of a referendum on staying in the European Union that may be held this year. Prime Minister David Cameron warns that leaving the EU could lead to thousands more migrants arriving in the country. Meanwhile, tension is rising in Calais, France, where thousands of migrants are living in squalid camps. VOA's Henry Ridgwell reports.
    Video

    Video Valentine's Day Stinks for Lebanese Clowns

    This weekend, on Valentine's Day in Lebanon, love is not the only thing in the air. More than half a year after the country's trash crisis began, the stink of uncollected garbage remains on the streets. Step forward "Clown Me In," a group of clowns who use their skills for activism. Before the most romantic day of the year the clowns have released their unusual take on love in Lebanon -- in a bid to keep the pressure up and get the trash off the streets. John Owens reports from Beirut.
    Video

    Video Families Flee Aleppo for Kurdish Regions in Syria

    Not all who flee the fighting in Aleppo are trying to cross the border into Turkey. A VOA reporter caught up with several families heading for Kurdish-held areas of northern Syria.
    Video

    Video Rocky Year Ahead for Nigeria Amid Oil Price Crash

    The global fall in the price of oil has rattled the economies of many petroleum exporters, and Africa’s oil king Nigeria is no exception. As Chris Stein reports from Lagos, analysts are predicting a rough year ahead for the continent’s top producer of crude.
    Video

    Video 'No Means No' Program Targets Sexual Violence in Kenya

    The organizers of an initiative to reduce and stop rape in the informal settlements around Kenya's capital say their program is having marked success. Girls are taking self-defense classes while the boys are learning how to protect the girls and respect them. Lenny Ruvaga reports from Nairobi.
    Video

    Video Chocolate Lovers Get a Sweet History Lesson

    Observed in many countries around the world, Valentine’s Day is sometimes celebrated with chocolate festivals. But at a festival near Washington, the visitors experience a bit more than a sugar rush. They go on a sweet journey through history. VOA’s June Soh takes us to the festival.
    Video

    Video 'Smart' Bandages Could Heal Wounds More Quickly

    Simple bandages are usually seen as the first line of attack in healing small to moderate wounds and burns. But scientists say new synthetic materials with embedded microsensors could turn bandages into a much more valuable tool for emergency physicians. VOA’s George Putic reports.
    Video

    Video Researchers Use 3-D Printer to Produce Transplantable Body Parts

    Human organ transplants have become fairly common around the world in the past few decades. Researchers at various universities are coordinating their efforts to find solutions -- including teams at the University of Pennsylvania and Rice University in Houston that are experimenting with a 3-D printer -- to make blood vessels and other structures for implant. As VOA’s Greg Flakus reports from Houston, they are also using these artificial body parts to seek ways of defeating cancerous tumors.
    Video

    Video Helping the Blind 'See' Great Art

    There are 285 million blind and visually impaired people in the world who are unable to enjoy visual art at a museum. One New York photographer is trying to fix this situation by making tangible copies of the world’s masterpieces. VOA correspondent Victoria Kupchinetsky was there as visually impaired people got a feel for great art. Joy Wagner narrates her report.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.