The announcement was slow to arrive, but three weeks after rumors of a possible downgrade to France's credit rating, reality has set in. The three main ratings agencies (Moody's, Standard & Poor's and Fitch) have rated just twelve countries, four of them European, at the highest possible level of creditworthiness. This time, S&P increased the exclusiveness of this elite club as the rating agency lowered both France and Austria's AAA rating by one level to AA+.
In total, downgrades have affected nine countries, and Spain is among them. At the end of the day, Standard & Poor's also confirmed one-step downgrades for Malta, Slovakia, Slovenia and two-step downgrades for Italy, Spain, Portugal and Cyprus. S&P reported that their massive downgrades were in response to the view that "political initiatives taken by European leaders during the past several weeks might be insufficient for completely stemming systemic stress in the Eurozone."
Recovery fund weakens
French Minister of Finance François Baroin was one of the first to speak up. He assured that losing the AAA rating "is not a catastrophe." Still, the real consequence of the downgrade is a weakening of the European Financial Stability Facility (EFSF), which thanks to Eurozone countries willing to offer aid, has been endowed with 440 million euros for ailing nations.