Brussels, 08/12/2011 (Agence Europe) - On Thursday 8 December, the European Commission challenged the foundation of credit rating agency Standard & Poor's to put the rating of all of Europe under “negative surveillance”. Amadeu Altafaj, a spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn, said that the Commission believes S&P's decision to put 15 eurozone countries under negative surveillance must not be extended to the whole of the EU. The EU27 currently has the top-notch triple-A rating, but might go down a level if the highest-rated countries in the eurozone are downgraded, explained Atlafaj. He said the credit rating of the EU must be considered on its own merits, which arise from the special status of the European budget and its resources.
Two days after putting the ratings of 15 eurozone nations under “negative implication CreditWatch”, Standard & Poor's announced on Wednesday evening, 7 December, that it had put the European Union's AAA rating under negative implication CreditWatch, adding that it may be downgraded if one or more EU member states lose their triple-A rating. Standard & Poor's said that it might also downgrade the rating of some big eurozone banks and published a list of the banks in question (which have been placed on negative implication CreditWatch).
The EU cannot borrow directly from the markets to cover any budget deficit because the EU Treaties say funding to balance the books has to come from its member states, but it has issued five-year and fifteen-year bonds to aid struggling countries (Hungary, Romania, Greece, Ireland and Portugal). There is an upper limit of €110 billion on EU bond emissions. (LC/transl.fl)