European Countries With "AAA" Ratings Downplay S&P Relevance, Worry About Their Own Problems

Monday, August 08, 2011 09:41
European Countries With

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Nearly every country with a "AAA" rating from Standard & Poor's is in Europe. They're too focused on their own credit issues to do much gloating today.

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The French lead the way with "total confidence" in the U.S. economy.


If anything, finance minister Francois Baroin is officially dubious about the ethics and the math behind the S&P move.


"We can ask why this agency took this decision based on figures that are not consensual," he told French radio reporters.


France might have a stake in questioning the rating agency's credibility.


While S&P says the country's AAA rating is safe, according to plenty of economists, the French now look vulnerable to a downgrade if things get worse in the euro zone.


As it is, the cost of insuring French debt is currently at a record 143 basis points -- about three times what it costs to ensure AA+ rated U.S. bonds.


The Germans are honestly too involved in saving the euro -- or worrying whether it can be salvaged at all -- to weigh in. An editorial in the influential news weekly Der Spiegel shrugs off the downgrade as "no witchcraft" and "not news."


"The rest of the world wonders, 'was this necessary?'" they ask.


Even on the German right wing, they actually care more about our politicians' stubborn refusal to raise taxes than they do about the Treasury's ability to repay its debt.


And in the United Kingdom -- which also has questions about its ability to maintain its AAA rating -- the press was too busy covering the second night of rioting in London to agonize about the U.S. credit rating.


Between them, these countries hold $430 billion in Treasury debt.  






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