EU criticizes S&P's eurozone countries rating cut
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Xinhua, January 14, 2012
The European Union (EU) Economic Affairs Commissioner Olli Rehn on Friday criticized Standard & Poor's for its decision to downgrade credit ratings of nine eurozone countries.
The commissioner said he regretted the S&P's "inconsistent" decision which came at a time "when the euro area is taken decisive action in all fronts of its crisis response," Rehn said in a statement.
"The recent EU decisions, combined with action by the ECB, have been instrumental in easing tensions in sovereign bonds markets." said Rehn.
S&P's announced on Friday to cut the 3A-rating of France and Austria and ratings of seven other European countries including Spain and Italy, saying the agreement reached by European leaders in December was not enough to address the region's debt problems.
The announcement dealt a heavy blow to the value of the euro which dropped to below 1.27 against the U.S. dollar later on Friday.
Rehn also reinstated needs to bring forward the European Stability Mechanism, which might bestow EU more firepower to fight crisis.
"The ESM will have its own capital base and thus will be less vulnerable to changes in ratings of its Member States." Rehn said.
