Brussels, 03/12/2012 (Agence Europe) - On Friday 30 November, Moody's credit rating agency downgraded from Aaa to Aa1 the long-term rating of the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM), and also downgraded France's debt. Klaus Regling, managing director of the ESM, said in a press release: “Moody's rating decision is difficult to understand. We disagree with the rating agency's approach which does not sufficiently acknowledge ESM's exceptionally strong institutional framework, political commitment and capital structure.” “In its rating decision even Moody's stresses the credit strengths of ESM and EFSF due to their low leverage and the creditworthiness of its member states”, Klaus Regling said. “This rating action does not inhibit ESM or EFSF in any way to act or emit.” The head of Eurogroup, Jean-Claude Juncker, who chairs the EFSF and ESM's board of governors, said the eurozone was fully committed to using the two funds to ensure financial stability.
The ESM will have the largest paid-in capital amount of any multilateral lending institution with €80 billion by 2014 (currently €32 billion) and its credit rating should therefore be less influenced by eurozone countries' ratings than the EFSF rating, whose lending capacity depends solely on national guarantees. (MB/transl.fl)