Moody's changes EU rating outlook to negative

SYDNEY: Moody's Investors Service has changed its outlook on the Aaa
rating of the European Union to negative, warning it might downgrade
the bloc if it decides to cut the ratings on the EU's four biggest
budget backers: Germany, France, UK and Netherlands.
The move will add to pressure on the European Central Bank to provide details of a new debt-buying scheme to help deeply indebted euro zone states at its policy meeting on Thursday.
Back
in July, Moody's changed its outlook for Germany, the Netherlands and
Luxembourg to negative as fallout from Europe's debt crisis cast a
shadow over its top-rated countries. The outlook on France and the UK
are also negative.
"The negative outlook on the EU's long-term
ratings reflects the negative outlook on the Aaa ratings of the member
states with large contributions to the EU budget: Germany, France, the
UK and the Netherlands, which together account for around 45 percent of
the EU's budget revenue," the ratings agency said.
Moody's said
the EU's rating would be particularly sensitive to any changes in the
ratings of these four Aaa member states, implying that if it downgraded
these four it might also cut the EU's rating.
Likewise, Moody's
said the outlook for the EU could go back to stable if the outlooks on
the four key Aaa countries also returned to stable.
The agency
also changed to negative the outlook the European Atomic Energy
Community (Euratom), on whose behalf the European Commission is also
empowered to borrow. - Reuters