S&P Puts the Eurozone on Creditwatch

by Marilou Long on December 6, 2011

in Banks,Credit Crisis,Debt,Foreign Markets,Uncategorized

Yesterday’s rally faded when rumors started to surface that S&P was going to downgrade certain countries in the Eurozone.  The actual report came out after the close, and the rating agency put 15 out of the 17 Eurozone countries on negative creditwatch which means that they could be downgraded.  Greece and Switzerland were the two countries that were not included; Greece has already been downgraded, and Switzerland has always been good at isolating itself.

The longer this crisis drags on, the higher the probability that Europe will fall into recession.  European leaders are meeting again this Friday to try to hammer out an agreement to impose fiscal discipline on the weaker members of the EU.  Bond yields in Europe have been coming down from their recent highs, so confidence in Merkel’s and Sarkozy’s ability to negotiate this crisis seems to be improving

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