Standard & Poor’s have added to the pressure for a sustainable Euro-zone deal considerably by putting 15 full member states on credit watch.
The US credit rating agency have suggested they may lower the European Financial Stability Fund’s (EFSF) top credit rating should any of the guarantors involved have their own debt grade lowered.
The threat to Euro-zone members, including France and Germany, comes just one day after the agency put some of Europe’s most credit worthy nations on watch for a downgrade within 90 days.
Angela Merkel, the German Chancellor was surprisingly dismissive of the threat. She stated; “What a rating agency does is its own responsibility.”
The news follows reports that Italy is the latest Euro-zone member on the brink of being engulfed by the global economic crisis.
With national debt rising well above the 7% ‘red alert’ level, Italy is close to requiring a significant bailout from Euro-zone members.
Problems in the country have drawn comparisons with the issues which Greece has recently experienced.
Euro-zone leaders are being forced to prepare for the worst as Italian debt threatens to reach 1.9 trillion.
The latest threat from S & P only adds to the pressure on those involved to find a sustainable solution which all parties are happy with.
Given the complexity of the situation it is not an enviable task, but it is one which must be approached with swift and decisive action.
Transferring money to Europe
If you are looking to invest in Europe, it would be wise to think carefully about how you will be transferring money to Europe. Foreign currency exchange rates quoted by banks are usually worse than the exchange rates available through specialist currency dealers.
So if you are looking to send money to Europe – which you will inevitably have to do if you are looking to make a property investment - be sure to compare the market before you buy your overseas currency.
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