Credit Rating agency Moody has downgraded the rating for European Union to “negative” in the Aaa category as a result of downgrading some of the major economies falling in the league.
The statement from Moody’s announcing the decision reads, “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 per cent of the EU’s budget revenue,”
The provisional rating of medium term notes (MTN) from EU has also been downgraded to “negative” along with the EU downgrade.
Moody cited the recent downgrading of German and Holland ratings on 23rd July as a supporting argument in favor of their EU downgrade. Moody said how it can make EU seem a strong contender for investment when the strongest countries from this region are facing a downgrade. France and United Kingdom’s credit outlook had also been changed to negative in the recent past.
Moody however did not desisted from warning EU from a further downgrade, if conditions prompt furthur downgrade of Germany, Netherlands, France or UK.
Photo- TRT-World, Radio Netherlands Worldwide