Reduce storm classifications hit 9 countries European and global markets enter a new phase of horror

Group of 20 defuse 'currency war'

Hit the global markets very disappointed after the agency Standard & Poor’s process of reducing the mass of the credit rating for the euro zone countries including 9 countries. The agency was stripped of France and Austria classified excellent (BAA. A.. BAA) in a move that could complicate efforts to resolve the European debt crisis that began two years ago.Survived and Germany, the biggest economy in the mass of the reduction process. And reduced the Standard & Poor’s Rating France and four other countries, one degree, while a rating downgrade of Portugal, Italy, Spain and Cyprus, two degrees. The Agency has reaffirmed the credit ratings of seven other members of the euro area. She said that among the sixteen countries reviewed were all negative expectations with the exception of Germany and Slovakia, which means the possibility of further reductions of credit during the next two years. In a statement released by the agency said that the initiatives, “the last of the European leaders appear to be sufficient to address fully the problems in the systems in the euro area. Criticized the agency solutions that rely almost exclusively on austerity measures. Condemned the European Commission immediately wrong decision, taken while the monetary union to move critically on all fronts to address the crisis. The last bad news from Athens center debt crisis since the beginning of 2010 as banks announced suspension of negotiations with Greece on the measures to restructure the debt.

Bad timing

The move Standard & Poor’s in the worst time of the French President Nicolas Sarkozy, who made it to maintain the degree of “AAA” a priority and a hundred before the day of the presidential ballot, which will run it, it seems. He said French Finance Minister Francois Parwan “This is not good news,” but “not a disaster,” trying to mitigation. He added after a crisis meeting at the Presidential Palace with Sarkozy and Prime Minister Francois Fillon and Minister Valerie Pécresse budget: not the rating agencies that dictate the policy of France. For his part, said his German counterpart Wolfgang Schaeuble that he should not overestimate the government and credit rating agencies. He added that France is on track, “and expressed his solidarity for the largest partner for Germany. He said the European Commissioner for Economic Affairs Olli Rehn in a statement he regretted the decision is logical for the Standard & Poor’s. He added: After verifying that the timing was coincidence, I feel sorry about the decision is logical taken by Standard & Poor’s in relation to the classification of several countries in the euro area at the time of this region are decisively on all fronts to address the crisis.

Explore options

For his part, Chairman of the Group and the ministers of finance in the euro zone, Jean-Claude Juncker said in a statement that the countries that provide guarantees for the financial rescue fund for the European Union confirms its intention to explore options to keep the classification at the AAA. All of this coincided also with the reduction of the excellent rating of Austria and Italy dropped two degrees to the classification of BBB +.This is the first move to Italy where my level because he had never withdrawn any rating agency and a division of Italy. The Standard & Poor’s reduced its rating in September Aatalaa from A + to A, and justified by failing to stabilize the government of Berlusconi and frequency on austerity measures.

Spanish position

Sculpture and the government of Prime Minister of Spain’s new Mariano Rajoy blamed the ratings downgrade of the country on its predecessor. Quoted by Spanish media for an unnamed source at the Finance Ministry as saying that the Spanish Government to maintain Rajoy blamed the decline on the previous one led by former Socialist Prime Minister Jose Luis Rodriguez Zapatero. Rajoy took over as prime minister on 21 December last year. The source said that the legacy of the past, as is the case for other things. He pointed out that the new Spanish government will continue to make every effort to change the ratings downgrade. The source added that the economic policy of a government committed to adjust the budget and structural reform.

Vision of a German

The German government has confirmed that the policy of fiscal discipline prescribed to reduce the public debt will end up a permanent solution to the problems of the euro area.The Finance Ministry said in Berlin that the policy of fiscal discipline, that have been negotiating since December last among all EU countries except Britain, the rules would impose a financial firm in a binding agreement. She said that this will restore market confidence in the euro area and enhance the long term. The ministry said in a brief statement: our solidarity and our determination to contribute in overcoming the crisis of sovereign debt in Europe is beyond a doubt. And said German Finance Minister Wolfgang Schaeuble outside the party meeting, a reduction in credit rating for the European countries was not a surprise for Germany. He continued, in reference to other countries in the euro area were to cut its credit rating: I think we are bound together so closely, so we can not not feel worthwhile, and the goal is to make us all on track. He Schäuble: It is crucial that we face a common destiny in Europe. He explained: we must abide our rules of financial management firm and improve our ability to compete. He continued: It was not a big surprise to us. We know that there are doubts about the euro zone. He stressed: This is precisely why we are working hard to put a book of rules for the euro area to be more stable. He said the resolution shows the validity of the application of the European Union summit European stability mechanism as soon as possible a stable financial institution with a permanent paid-up capital.

Confidence in the euro

Schaeuble called the support of the single European currency, the euro, strongly and said: I have passed in 2011 quite well despite the economic difficulties it not for the single European currency for Germany is that it occupies the economic position even approximately. Schaeuble said that although the decision-making in Europe is often difficult, however, must maintain the confidence enjoyed by the common European currency. He believed Schaeuble that maintaining this trust requires that at times start a country itself first before you do the same other countries suggesting that the pursuit of Germany for the adoption of a tax on financial transactions, said that Germany was banned by the short-selling and then followed later many countries . Schaeuble said: If there is a change in the global economy, it affects our economy as well because we have in this economy.

Confusion Austrian

For her part, the Government of Austria that she could not understand the reason behind the reduction of agency Standard & Poor’s credit rating despite the efforts of European resolve the debt crisis. She explained the Austrian Finance Minister Maria Fekter told the Austrian news APA that the reaction of markets will not be catastrophic because the Austrian economic data intact. He said Austrian Chancellor Werner Faymann and his deputy, Foreign Minister Michael Hbindlegr in a joint statement that Vienna is working on a plan to restructure the budget in the next five years and the parliament recently passed a bill to limit spending. They said: Can not understand why the assessment of Member States in the euro area in a different way, although they are working on solutions in close coordination. The second reason for reducing the credit rating is that Austrian banks are among the largest lenders in Central and Eastern Europe.

Importance of the step

Economists and analysts said in Vienna that the Austrian economy will not suffer severely cut its credit rating. Analysts said the interest rate on sovereign bonds in the capital markets varies strongly between countries that have the same credit rating excellent since last year, where countries such as Germany, Finland and the Netherlands pay very low interest on their sovereign bonds, while France and Austria to pay higher interest, although all of these States have the AAA classification. Said Stefan Brokpoar chief economist at the Bank of Astoria Group’s Italian bank UniCredit in Vienna, to some degree I is not worried about the repercussions. At the same time, experts say that the Austrian government to work hard to implement a package of austerity measures to save 10 billion euros or 12.7 billion dollars over the next five years although Austria is one of the richest countries in Europe.