Brussels, 20/12/2013 (Agence Europe) - Europe's leaders are not particularly concerned about the downgrading of the EU's long-term credit rating by Standard & Poor's from AAA to AA+ on Friday 20 December. The rating agency said this was due to the reduction in quality for the twenty-eight member states and the tense budget negotiations that led to fears of risks that the EU would continue to support some member states.
The downgrade coincided with a European summit, but Europe's leaders refused to comment on this, except that the president of the European Council, Herman Van Rompuy, said that it would not spoil Christmas. The president of the European Commission, Jose Manuel Barroso, said he did not agree with the decision because the EU budget had always been balanced and the EU had no deficit or debt. A similar reaction had been made by Euro Commissioner Olli Rehn, who said the member states had always provided their full contribution on time. Rehn added that the other two ratings agencies, Fitch and Moody's, were keeping the EU's rate at AAA.
After the European summit, the German chancellor, Angela Merkel, refused to comment on the downgrade, but French President François Hollande said it was “odd” because the EU did not borrow money. Commenting on S&P's justification for the downgrade, Hollande admitted that it had proved difficult to agree on an EU budget but, if member states were unable to produce the cash for the EU, then it was those countries that should be downgraded, not the EU. S&P has downgraded seven member states, including France, this year. The Belgian prime minister, Elio Di Rupo, said this looked like the sort of analysis made by experts who said, before the crisis, that everything was fine The newly appointed PM of Luxembourg, Xavier Bettel, said it was not something to make him jump off a bridge. Both said, however, that the reform and budget consolidation process must continue. Only the Italian prime minister, Enrico Letta, commented that S&P's decision was not be underestimated as it shows that the transition period is still ongoing and the EU and the euro are still being monitored by the markets.
The downgrade of the EU's rating to AA+ with stable prospects suggests that the agency will not adjust the rating in the medium-term. Six member states still have the highest credit rating, AAA. (MD/transl.fl)