FRANCE DOWNGRADED! EURO TANKS!
Euro plunges on France rating fears
From The Guardian
Standard & Poor’s believed to be about to downgrade several eurozone countries, including France’s prized AAA credit rating.
Nicolas Sarkozy, who is standing for re-election this year, will find his credibility seriously damaged if France loses its AAA credit rating.
The euro has plunged against the dollar, amid rumours that the credit-ratings agency Standard & Poor’s is poised to downgrade several eurozone countries later today, including France.
The euro declined sharply against the dollar, to below $1.27, as the reports swirled around Europe’s financial markets.
The move, which was first signalled by S&P before Christmas, could plunge financial markets into fresh turmoil, just as a relatively successful bond auction by Italy this morning had raised hopes that the worst of the sovereign debt crisis was over.
The loss for France of its treasured AAA status would be a blow to the economic credibility of Nicolas Sarkozy, who must stand for re-election later this year.
Reuters quoted a “senior eurozone source” as saying that several countries were about to be downgraded. France’s public finances are viewed as vulnerable if Europe has to bail out more eurozone members in the coming months, perhaps including Italy or Spain. Governments have to be given advance warning by ratings agencies of any sovereign rating downgrade.
The tension around financial markets was exacerbated by news that talks between the Greek government and its private-sector bondholders had been halted until next week.
Persuading banks and hedge funds holding Greek bonds to accept a loss is a key part of the bailout deal that Athens requires to avoid plunging into bankruptcy. Europe’s leaders are due to meet at the end of this month to hammer out the next moves.
The Greek finance minister, Evangelos Venizelos, said: “We will most likely resume talks next Wednesday. We must process more issues.”
Dr. Pinna says:
We are seeing the beginning of a great change. Either the Euro disappears or the United States of Europe, a federalist Grande Empire, alla USSR, emerges from the wreckage.
People are too lazy to think small. Thinking Big is much easier than solving problems by hard work and individualism. We will see a gigantic Euro Zone filled with beaurocrats and regulations.
The West will then sink faster into the low living standards found in all the countries around the Equator. The living standards of Brazil, Africa and Bangladesh will become prevalent in Europe.
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Filed Under: Banks • Debt • Economy • Euro • News Briefs
Yes, the USA says it will continue to print money making it “liquid” while ECB says it will not print, so the Dollar is considered safe and Euro having trouble. I think the ECB is right while USA is printing as long as it has green ink and paper. Both combined supports the rise of Asia. Red money seems to be the best!