Standard & Poor's rating threatens to fall to 15 euro area countries, including Germany and France. Emergency Fund of the euro area is also threatened. S & P German politicians accused of political games.

Rating agency Standard & Poor's does not believe that the euro area is able to take concrete measures to resolve the debt crisis. She placed "under observation" (CreditWatch negative) with a negative outlook on long-term credit rating of 15 euro area countries, threatening to demote them. "Supervision negative 'means that chances are above 50% in rating countries to be monitored decreased in the next three months.

Among the countries targeted by U.S. rating agency include Germany, France, Austria, Finland, France, Luxembourg and the Netherlands, all with maximum rating - AAA. Credit rating agency S & P said yesterday, after closing the Stock Exchange in New York, that the warning on the demotion follows the deepening crisis in the euro area, "putting pressure lowering of solvency of the entire euro area" by the recession. Agency France said that the rating could be reduced by two steps, while the German one step.

Agency criticized the fact that, European politicians still have different opinions on how to solve euro crisis. "Another argument, 'there is no agreement on the" ability to apply a monetary union fiscal policy and long-term economic " , he explained Standard & Poor's. European and Asian exchanges closed yesterday on red, after the announcement S & P oil and copper prices fell. The euro has depreciated against the dollar.

Zero reaction

The two major players in the settlement of euro, Berlin and Paris reacted to the surprise of many analysts, calmly, almost with indifference, in a joint statement announcing that "noted" the rating agency's announcement.,, A One rating agency bears responsibility for the decisions it takes, "the German Chancellor Angela Merkel. "Thursday and Friday (at the EU summit in Brussels) will take the necessary decisions for the euro area and that will stabilize the monetary union," added the head of the Government in Berlin.
To reassure the French people, French Finance Minister, François Baroin said that S & P did not take into account the Franco-German agreement, and that Paris would not apply other austerity measures beyond those already announced. He stressed that the rating agency warning signals lack of confidence in Europe and that there is actually hexagon.

Distraction from U.S. debt

France is still the target of rumors concerning demotion spring and three weeks ago she was the victim of an error by the S & P, who sent an email in which relegated hexagon. French qualifier with a descent stage would induce additional costs the state $ 3 billion per year in state debt, Reuters news agency notes.

Not as German politicians reacted calmly. One of the voices of the most powerful of the Christian Democratic Union, led by Merkel, Michael Fuchs, told the newspaper, Die Welt "that behind the decision of S & P lie political calculations aimed at distracting attention from the debt crisis in which the the United States. The opposition of Germany (SPD) used the occasion to call into question his ability to manage crisis Merkel.

IMF wants more

President of the Eurogroup, luxemburgezul Jean-Claude Juncker, called the decision S & P as "incorrect and" exaggeration high. "" I am amazed. Decision S & P comes after significant efforts in recent days to overcome the crisis, such as programs of austerity in Italy and Ireland, "said Juncker, Luxembourg Prime Minister who is also one of the countries on the blacklist of the U.S. rating agency. The U.S. rating agency consent appears to be Christine Lagarde, the IMF chief, who welcomed the Franco-German agreement, stating however that it takes more than the euro area to regain market confidence and investors.

In any case, the U.S. rating agency warning comes the day that Timothy Geithner, U.S. Treasury Secretary, began his first European tour with a stop in Germany. U.S. will not be just an observer of the debt crisis in the euro area, for fear of the consequences it has on them.
States remain without the safety net

Despite all the strategies developed by European leaders to rescue the euro, European economic situation continues to deteriorate. Basically, the decision of credit rating agencies S & P shows that no state is no longer considered safe community by investors. Germany, the largest and most powerful economy in the EU, is put together with other countries with problems in the euro area and could lose "AAA" rating.

Rating determines the interest on that borrowing countries of the markets. As most of these countries are running budget deficits, interest on that borrowing from international capital markets are very important.

Last night, S & P said it put under surveillance perspective downward revision and rating EFSF ("AAA", the best possible). But more than that, the decision of the S & P shaken the very structure that EU leaders hoped to build new European economy out of crisis stronger and more powerful.

Money more expensive

Germany is the largest contributor to the EU emergency fund (European Financial Stability Facility - FESF). France is the second. Even if, of all six states rated "AAA" (which, in total, a contribution of 58% to fund emergency), only the rating of France will be reduced (S & P warns of a reduction of two levels, Moody's and Fitch say that they could do the same), then emergency fund will lose "AAA" rating. France's contribution is 20.3% of the capacity credit of the fund.

Fund bond issue and the money thus obtained are used for lending to countries with problems. Therefore, FESF depends as much on the rating it has. If the fund can not borrow cheaply, then the whole mechanism of rescue - and the last safety net - the euro area collapses.

Basically, this would mean that EU leaders no longer have any leverage in the short term to expanding crisis. Emergency Fund was created in order to intervene when a state can not borrow at sustainable rates in international markets and, thus, stop the crisis extending from one state to another.

German Chancellor Angela Merkel and French President Nicolas Sarkozy have announced firm plans to combat the crisis, including modification of European treaties so as to correct the imbalances that have allowed Europe to reach the critical situation in which the. But all these require time and plans submitted by the two so far include solutions for the near future, and states remain defenseless in the face of such markets.

"A political statement"

"I think the timing and size of warning they are dealing with a clear political context and shows how a rating agency is involved in politics," said Ewald Nowotny, Austrian Central Bank Governor. "It's a political statement, which must be seen in the context of the EU summit, "said Nowotny. Analysts say the S & P announcement is meant to put pressure on European leaders. He said it in more diplomatic and German Finance Minister, Wolfgang Schäuble. ,, World markets have confidence in the euro area, "he said, adding that the S & P warning" will boost the "European leaders to reach a common EU summit that begins tomorrow.