Ratings downgrade: Average common denominator | The Economist

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 This is an interesting article from the Economist and worth a read. Check it out! 

Ratings downgrade: Average common denominator | The Economist.

The point that caught my attention is the last paragraph that speculates on possible German downgrade at some stage.

Is it just remotely possible that the UK retains its AAA status and Germany is downgraded – with Germany tainted by the Euro contagion?

2 responses

  1. Pit, I take your point.

    I still think that its a question of confidence and relative fear. If the speculators thought that ECB would unload virtually unlimited fire-power, they would back-off and lick their wounds.

    Sadly, the ECB still cannot act like a full-blown central bank, so the speculators are winning the day. See my blog on “Why the UK still has a Triple A Rating”.

    I fear that the German sponsored policy of fiscal compact or converegence on economic management will not be enough. Other short-term measures will be required to save the Euro, possibly including Eurobonds. However, I agree with Angela Merkel that Eurobonds alone would not be a solution.

  2. That article only confirms my opinion that the planned-for Eurobonds, which our politicians try to sell as absolutely triple-A worthy, will defnitely NOT be that, but just a mix of the ratings of the paerticipant countries – and thus will NOT be the promised way out of the crisis.

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