Support 100 years of independent journalism.

  1. World
  2. Europe
14 January 2012updated 27 Sep 2015 5:40am

Eurozone crisis: ratings agency downgrades nine countries

Standard & Poor's deals heavy blow to French economy by removing AAA credit rating.

By Helen Lewis

Fiscal austerity alone will not solve the Eurozone crisis, according to rating agency Standard & Poor’s, which carried out a mass downgrading on Friday night.

France lost its AAA rating — the highest possible — and moved to AA+, as did Austria, while Portugal and Cyprus were downgraded to junk status. Italy, Spain, Malta, Slovakia and Slovenia also saw their ratings cut.

S&P said that its decision reflected the fact that austerity “risks becoming self-defeating”. Markets fell on the news, with the FTSE closing 26 points down at 5636.

Britain still has a triple-A rating from Standard & Poor’s, which has caused some adverse comment by Eurozone politicians. Michael Fuchs, deputy leader of Angela Merkel’s Christian Democrat party, said: “Standard and Poor’s must stop playing politics. Why doesn’t it act on the highly indebted United States or highly indebted Britain?”

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.

The decision will cause a headache for French president Nicolas Sarkozy, who is running for re-election this year. Today’s Libération had some fun at his expense (click here for their front page).

Content from our partners
How do we secure the hybrid office?
How materials innovation can help achieve net zero and level-up the UK
Fantastic mental well-being strategies and where to find them

Yesterday’s Guardian live blog provides a helpful summary of all the major developments, while Samira Shackle blogged in December about S&P’s threat to downgrade all 15 eurozone countries, and why that matters.