View Full Version : Standard & Poorís cut France Ratings? Debt crisis in Europe: first quarter focus on f


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Market rumor Standard & Poor's will cut France AAA credit ratings, but French government said it had not received notification. Often in ordinary Standard & Poor's will to inform the Government 12 hours before the credit ratings adjustment. The Wall Street Journal reported, European debt crisis may come back in early 2012.
Following are five major focuses of Investors in the first quarter:
1. Greece plans in January to complete the "voluntary" debt exchange, to cut 100 billion euros debt, and gradually the debt to gross domestic product (GDP) ratio from the current over 160% to 120%. However, it is not known whether there is sufficient investor participation in the program. Even if they are willing to accept, outsiders also worry that the case will not solve the debt problems of Greece.
2. Fear of European credit rating was downgraded. S & P may cut the 16-nation euro zone ratings, Moody's ratings also intend to re-evaluate European countries rating. Although market's much attention focused on the French AAA credit ratings, In fact, greater risk faced by Italy, because it may be reduced to BBB, lead to the increase in issuance costs, thus reducing investor demand.
3. European relief mechanism will be the focus. EFSF cannot strengthen the power through leverage, lack of interest to investors. March, European governments will discuss the European stability mechanism continued from EFSF, five hundred billion euros ceiling, inevitably Italy and other countries will request increase requirements limit, resulting in increased friction between the European governments.
4. Eastern European countries may lead to market risk exposure of banks and increase concern with the political tensions. Hungary in particular, the problem is most serious. Since late last month, Hungary ignoring the European Bank, European Commission and the IMF, passed a bill, cripple the independence of central Bank of Hungary, so that government officials have greater influence on monetary policy, this brings funding risk to Hungarian market, and make it more complicated negotiations with IMF.
5. Even though many decisions from the euro area make by consensus, however, as Finland is not ruled out as sudden move of hardliners of the country may bring up unexpected troubles, for example, a relief agreement in 2011 pushed back because of Finland. In addition, France will hold presidential elections in April, Outsiders also worried that once the regime change; solution for European issues probably will be regenerate.

From HPC services.