Moody's Downgrades Six European Nations
Moody's Ratings Service on Monday downgraded its ratings for the sovereign debt of six European nations over concerns about their exposure to the continent's ongoing debt crisis. Moody's also adjusted their outlook on three other euro area nations, indicating they could be in line for a downgrade in the next few months. The six countries already downgraded were Italy, Malta, Slovakia, Portugal, Slovenia, and Spain, while Austria, France and the UK had the outlook of their AAA ratings changed to negative.
Italy's credit rating was lowered to A2, Spain's was lowered to A1, and Portugal's was dropped to Ba2, with Moody's taking a negative outlook on all three. Moody's is the last of the three major ratings firms to downgrade most major European economies, after similar moves were made by Standard & Poor's and Fitch last year. The entire global financial community, meanwhile, is keeping a close eye on the developing situation in Greece, which needs further bailout assistance to prevent a default next month.
Greece's Parliament on Monday approved a package of austerity measures required by European officials and the IMF as stipulations for further bailout assistance. On the line is a 130 billion euro bailout package, without which Greece will be unable to pay a 14.5 billion bond redemption scheduled for next month, constituting a default by the debt-riddled nation. Of course, EU officials were not satisfied with the reforms approved Monday, and stipulated that Greece would have to identify another 325 million euros in spending cuts to get more aid.