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France Loses AAA Rating from S&P
- stevedekorte 15y agoDon't worry, Krugman says debt doesn't matter.
- EiZei 15y agoIf you are still in one of those AAA-rated countries it would seem so since Germany's getting negative interest for theirs apparently.
- jcitme 15y agoNot an economist here, so can anyone explain why this happened, what exactly does this change now, and how does this affect the future?
- schallis 15y agoRemember that these are the guys that rated 2008's toxic bonds AAA. Does what they say really matter?
- idont 15y agoYes and for many reasons: 1.- Some companies or pension funds, etc. only buy AAA products. Without that precious rating you lose potential buyer. 2.- These countries live on debts. Bad rating => higher costs => taxes increases or spending cuts (which is an easy programm these days in Europe ;) ). Note: France is not the US, investors have not the same trust into them. 3.- GDP, jobless rate, export balance, etc: French are out and German are in which will have hugh impacts on the solidarity fund, political credibility, etc. (And remember French are still sensitive about having a Germany not dominating the Europe.) The worst part is that Germany has kept its AAA. This means that the downgrade does not punish a "European problem" but a "Country problem", and this will have hugh impacts during this election year and for solving the issues in European.
- joeybaker 15y agoIt's going to be funny when S&P raises all of these countries back to AAA in 2-3 years. … Alternatively, it's going to be funny when S&P has no more AAA rated bonds and AA becomes the new norm (since the A-C scale apparently wasn't enough to begin with.)