France could loose AAA rating – Moody’s
RATINGS agency Moody’s has warned it may put a negative outlook on France’s AAA rating within the next three months if it is too costly to bailout its banks and deal with the European sovereign debt crisis.
The warning comes just ahead of a meeting of European leaders next weekend which is expected to discuss a likely Greek debt default and banks with an exposure to this, including French institutions.
France needs to prove its “continued commitment to implementing the necessary economic and fiscal reform measures,” according to Moody’s, which placed the US’s AAA rating on negative outlook earlier this year.
Germany and France, the eurozone’s two biggest economies, are heading up talks ahead of the October 23 summit.
“The deterioration in debt metrics and the potential for further contingent liabilities to emerge are exerting pressure on the stable outlook of the government’s AAA debt rating,” Moody’s added.
A number of French banks have exposure to Greek debt while Moody’s also said the Government there has less fiscal wriggle room than during the crisis of 2008.