Moody's Adjusts Ratings of 9 EuroZone Countries

Moody's Investors Services downgraded the sovereign debt ratings of six European Union nations and adjusted the outlook on three others to reflect a negative outlook.

Downgraded were:

• Italy downgraded from A2 to A3; negative outlook
• Malta downgraded from A2 to A3; negative outlook
• Portugal downgraded from Ba2 to Ba3; negative outlook
• Slovakia downgraded from A1 to A2; negative outlook
• Slovenia downgraded from A1 to A2; negative outlook
• Spain downgraded from A1 to A3; negative outlook

Austria, France, and the United Kingdom had the outlook on their current Aaa rating changed to negative.

The release from Moody's noted the main drivers of the actions are:

• The uncertainty over (i) the euro area's prospects for institutional reform of its fiscal and economic framework and (ii) the resources that will be made available to deal with the crisis.
• Europe's increasingly weak macroeconomic prospects, which threaten the implementation of domestic austerity programs and the structural reforms that are needed to promote competitiveness.
• The impact Moody's believes these factors will continue to have on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.

This announcement reflects the continued fragility of the Eurozone even if they decide to provide between 130 and 145 billion Euro's to Greece for the 2nd bailout of that country.  Most of the Eurozone, which has embraced Eurosocialism for at least several decades, are finding that the economic effects of these decisions do have a point where one, as Margaret Thatcher noted, 'runs out of other people's money'.