The long awaited verdict of Standard & Poor’s (S & P) on the ratings of 15 countries in the euro area, placed under surveillance this month with negative implications, is expected in January, said Friday two government sources European cited by Reuters. “We have received unofficial information that the S & P ratings assessment results will come in January. After the discussions we have had, they have hinted that”, said one official. He said that he can only talk about his country, but assumed that all 15 states evaluated will learn the decision at the same time.
An official from another euro area country said in turn that decision is likely to take place next month. S & P warned on December 6th that it will downgrade in block ratings for euro area countries, if EU leaders fail to decide how to resolve the debt crisis during the summit on December 9th. The decisions announced at the summit of European leaders were not well received by the financial markets. A spokesman for the S & P declined to comment on Friday.
On the other hand, the director of S & P division for financial institutions, Scott Bugie, said Friday in an interview with Reuters that loans of 489 billion euros provided by the European Central Bank (ECB)to the European banks are a positive sign, but do not protect credit institutions of the risk of rating downgrade. Some of the largest euro area banks, including Deutsche Bank, BNP Paribas, Societe Generale and UniCredit have been placed under surveillance by S & P for a possible downgrade.
Bugie said that ECB’s lending to the banks do not solve their major problem, namely the large portfolios of government bonds. He warned that 2012 will be a turbulent year, and a very difficult first quarter. “For for Italy there will be a true test because of large loans to set to reach maturity” said Bugie. And other rating agencies closely follow developments in the region.
Moody’s confirmed Friday the triple “A” rating of Austria, but warned that the debt crisis is threatening the ratings of all euro area countries. The agency announced this month that it will assess in the first quarter ratings of the 27 EU countries. Fitch Ratings placed under surveillance, last week, the ratings of six euro area countries, including Italy and Spain, for a possible downgrade in the near future.
