Moodys cuts credit ratings of European nations

Ratings agency Moody’s has lowered the credit ratings of several eurozone nations including Portugal, Spain and Italy, reports the BBC.

The agency also downgraded Malta, Slovakia and Slovenia. Moody’s also put Britain, Austria and France on ‘negative outlook’ implying that there is a 30 per cent possibility of being downgraded over the 18 months ahead. It said that European growth was hindering efforts to deliver austerity measures and economic reform.

The sharpest downgrade was delivered to Spain, with the Iberian nation seeing its rating lowered by two notches to ‘A3’. Italy was lowered one notch to A3, while Portugal was cut by a smaller margin – one step to Ba3.

Moody’s report said its moves were down to the uncertainty over the prospects of the eurozone in terms of the institutional reform of its economic and fiscal framework. It also questioned if European leaders would have the ability to cope with the crisis.

The decision has been criticised by Spain, which cited Moody’s welcoming of the financial reforms in the Mediterranean nation. Finance Minister Cristobal Montoro said that they say they welcome the reforms but then decide the opposite in their criteria. He described the situation as “fairly paradoxical”.

Montoro went on to say that they do their work and evaluations but in the end it’s all contradictory. He added that they say they value the reforms, but then state that they will not achieve their goals.