Standard & Poor’s warned 15 eurozone nations, including several top-rated ones, that they might be subject to downgrades if a planned summit meeting of eurozone leaders fails to come up with a satisfactory course of action to resolve the bloc’s debt crisis. European Union leaders are scheduled to meet Thursday and Friday to discuss the crisis and strategies to contain it.
The initial report came before the closing bell on Wall Street and sent stocks down from earlier highs. When it was confirmed after the close, Bloomberg reported that bondholders and analysts were critical of the action and its timing. Anthony Valeri, a market strategist with LPL Financial in San Diego, was quoted saying, “S&P should back off. It complicates the job of the EU leaders to resolve the debt problem.”
The ratings agency warned that top-rated countries including Austria, Belgium, Finland, Germany, the Netherlands and Luxembourg could be in for single-notch downgrades, with France and the others in line for a probably two-notch drop if the summit does not produce a solution that meets S&P’s criteria. In a statement, S&P said in part that “continuing disagreements among European policy makers on how to tackle” the ongoing debt crisis are putting the countries’ financial stability in danger.