Moody's Investor Services cut the credit rating of six euro area economies, while warning of a downgrade to France's top rating, stating that the increasingly weak macroeconomic prospects as well as the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework, threaten the implementation of domestic austerity programs and the structural reforms that are needed to promote competitiveness.
Spain's rating was slashed to A3 from A1, Italy to A3 from A2, Portugal to Ba3 from Ba2, Malta to A3 from A2, and Slovakia and Slovenia were both downgraded to A2 from A1, where the six aforesaid nations in addition to AAA-rated Austria were given negative outlooks.
In addition, Moody's warned that top-rated economies France and U.K. may be prone to a downgrade in the coming period. In response, French Finance Minister said France retained its top rating due to the size of its economy and its increased productivity, while U.K. Chancellor of the Exchequer George Osborne said this is proof that, in the current global situation, Britain cannot waver from dealing with its debts.
On the other hand, Moody's affirmed top rating for Germany and said the rating is appropriate, and also affirmed the top rating for the European Financial Stability Fund (EFSF).