The Euro Zone's prospects aren't looking too bright these days. Standard and Poor's has downgraded nine countries and put fourteen total on "credit watch" thanks to the lagging response to Greece's debt. Only Germany retained its triple-A rating and received a stable credit outlook amid a breakdown of Greek borrowing negotiations. CNBC has the scoop:
Standard & Poor's downgraded the credit ratings of nine euro zone countries, stripping France and Austria of their coveted triple-A status but not EU paymaster Germany, in a Black Friday 13th for the troubled single currency area.
"Today's rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policy makers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone," S&P said in a press release announcing the downgrade.
S&P lowered its long-term rating on Cyprus, Italy, Portugal and Spain by two notches, and cut its rating on Austria, France, Malta, Slovakia and Slovenia by one notch.
The move puts highly indebted Italy on the same BBB+ level as Kazakhstan and pushes Portugal into junk status.
The credit-rating agency affirmed the current long-term ratings for Belgium, Estonia, Finland, Germany, Ireland, Luxembourg and the Netherlands.
S&P said the euro zone faced stresses including tightening credit conditions, rising risk premiums for a growing number of sovereigns, simultaneous deleveraging by governments and households and weakening economic growth prospects.
It also cited political obstacles to a solution to the crisis due to "an open and prolonged dispute among European policy makers over the proper approach to address challenges."
Austerity and budget discipline alone were not sufficient to fight the debt crisis and risked becoming self-defeating, the ratings agency said.
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