"Following the EU Summit on 9-10 December, Fitch has concluded that a ‘comprehensive solution’ to the eurozone crisis is technically and politically beyond reach…That’s the rather deadpan punchline of a Fitch Ratings action on Friday, placing the ratings of Belgium, Cyprus, Ireland, Italy, Slovenia and Spain on negative outlook. They might be downgraded one or two notches early in 2012. They’re putting every investment-grade eurozone sovereign on negative outlook so expect a few more supplementary statements. Fitch had affirmed France’s AAA rating but revised it to negative at pixel time. (Update — see text below.)
Here’s the main bit from the statement:
Following the EU Summit on 9-10 December, Fitch has concluded that a ‘comprehensive solution’ to the eurozone crisis is technically and politically beyond reach. Despite positive commitments by EU leaders at the Summit, notably the decision to accelerate the creation of the European Stability Mechanism (ESM) and to place less emphasis on private sector involvement (PSI), the concerns held by Fitch prior to the Summit remain pressing and have not been materially eased by the Summit outcome (also see, ‘Summit Does Little To Ease Pressure on eurozone Sovereign Debt,’ 12 December). Of particular concern is the absence of a credible financial backstop. In Fitch’s opinion this requires more active and explicit commitment from the ECB to mitigate the risk of self-fulfilling liquidity crises for potentially illiquid but solvent Euro Area Member States (EAMS)..."at http://ftalphaville.ft.com/blog/2011/12/16/804161/fitch-big-euro-fix-technically-and-politically-beyond-reach/
