Standard & Poor’s, continuing a theme it began earlier this week, said Wednesday that the European Union itself could face the loss of its AAA credit rating, as could large euro zone banks, if member nations of the EU are downgraded as a result of leaders’ failure to act decisively at a summit meeting on the debt crisis.
The warning came after a similar warning on Monday, when S&P threatened to downgrade 15 of the 17 euro zone nations.
Reuters reported that while an S&P spokesman said a cut of one notch to the EU’s rating would have no effect on EU countries that aren’t part of the euro zone, it could make EU borrowing more expensive for rescue packages to assist weaker member states.
S&P also warned, as a follow-on to Monday’s action, that some of the euro zone’s biggest banks, such as Commerzbank, Société Générale, Crédit Agricole, BNP Paribas and Deutsche Bank, could also have their ratings cut if euro zone countries were downgraded.