Here Comes The S&P Downgrade Barrage - Full Statement, In Which S&P Says France May Get Two Notch Downgrade

Tyler Durden's picture

Standard & Poor's Ratings Services today placed its long-term sovereign ratings on 15 members of the European  Economic and Monetary Union (EMU or eurozone) on CreditWatch with negative implications. 

We have also maintained the CreditWatch negative status of our long-term  rating on Cyprus and placed its short-term ratings on CreditWatch with negative implications. The ratings on Greece have not been placed on  CreditWatch. The ratings on the eurozone sovereigns are listed below.

Today's CreditWatch placements are prompted by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole.

We believe that these systemic stresses stem from five interrelated factors:

  1. Tightening credit conditions across the eurozone;
  2. Markedly higher risk premiums on a growing number of eurozone sovereigns, including some that are currently rated 'AAA';
  3. Continuing disagreements among European policy makers on how to tackle the immediate market confidence crisis and, longer term, how to ensure greater
  4. economic, financial, and fiscal convergence among eurozone members;(4) High levels of government and household indebtedness across a large area of the eurozone; and
  5. The rising risk of economic recession in the eurozone as a whole in 2012. Currently, we expect output to decline next year in countries such as Spain, Portugal and Greece, but we now assign a 40% probability of a fall in output for the eurozone as a whole.

Our CreditWatch review of eurozone sovereign ratings will focus on three of the five key factors that form the core of our sovereign ratings methodology:

the "political," "external," and "monetary" scores we assign to the governments in the eurozone (see "Sovereign Government Rating Methodology And Assumptions", published June 30, 2011). Our analysis of "political dynamics" will focus on both country-specific and eurozone-wide issues that appear to us to be limiting the effectiveness of efforts to resolve the market confidence crisis. Our analysis of "external liquidity" will focus on the borrowing requirements of both eurozone governments and banks. Our analysis of "monetary flexibility" will focus on ECB policy settings to address the economic and financial stresses the countries in the eurozone are increasingly facing.  

We expect to conclude our review of eurozone sovereign ratings as soon as possible following the EU summit scheduled for Dec. 8 and 9, 2011. Depending on the score changes, if any, that our rating committees agree are appropriate for each sovereign, we believe that ratings could be lowered by up to one  notch for Austria, Belgium, Finland, Germany, Netherlands, and Luxembourg, and by up to two notches for the other governments.  [THIS MEANS FRANCE]

Our ratings on Greece (Hellenic Republic; CC/Negative/C) are not affected by today's actions, as a 'CC' rating under our rating definitions connotes our belief that there is a relatively high near-term probability of default.

We are publishing separate media releases with the rationale for each rating action on the 16 CreditWatch actions. We are also publishing the following article: "Credit FAQ: Factors Behind Our Placement of Eurozone Governments on CreditWatch".

Following today's CreditWatch listings, Standard & Poor's will issue separate media releases concerning affected ratings on the funds, government-related entities, financial institutions, insurance companies, public finance, and structured finance sectors in due course.


RATINGS LIST             To                   From

Long-term ratings on CreditWatch negative

Austria (Republic of) Sovereign Credit Rating  AAA/Watch Neg/A-1+   AAA/Stable/A-1+

Belgium (Kingdom of) Sovereign Credit Rating   AA/Watch Neg/A-1+    AA/Negative/A-1+

Finland (Republic of) Sovereign Credit Rating   AAA/Watch Neg/A-1+   AAA/Stable/A-1+

France (Republic of) Sovereign Credit Rating   AAA/Watch Neg/A-1+   AAA/Stable/A-1+

Germany (Federal Republic of) Sovereign Credit Rating   AAA/Watch Neg/A-1+   AAA/Stable/A-1+

Luxembourg (Grand Duchy of) Sovereign Credit Rating   AAA/Watch Neg/A-1+   AAA/Stable/A-1+

Netherlands (The) (State of) Sovereign Credit Rating   AAA/Watch Neg/A-1+   AAA/Stable/A-1+

Long- and short-term ratings on CreditWatch negative

Estonia (Republic of) Sovereign Credit Rating   AA-/Watch Neg/A-1+   AA-/Stable/A-1+

Ireland (Republic of) Sovereign Credit Rating   BBB+/Watch Neg/A-2   BBB+/Stable/A-2

Italy (Republic of) Sovereign Credit Rating   A/Watch Neg/A-1      A/Negative/A-1 

Malta (Republic of) Sovereign Credit Rating   A/Watch Neg/A-1      A/Stable/A-1

Portugal (Republic of) Sovereign Credit Rating   BBB-/Watch Neg/A-3   BBB-/Negative/A-3

Slovak Republic Sovereign Credit Rating   A+/Watch Neg/A-1     A+/Positive/A-1

Slovenia (Republic of)  Sovereign Credit Rating   AA-/Watch Neg/A-1+   AA-/Stable/A-1+
Spain (Kingdom of)  Sovereign Credit Rating   AA-/Watch Neg/A-1+   AA-/Negative/A-1+

Short-term ratings on CreditWatch negative, long-term ratings still on
CreditWatch negative

Cyprus (Republic of) Sovereign Credit Rating   BBB/Watch Neg/A-3    BBB/Watch Neg/A-3

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Fips_OnTheSpot's picture

Luxembourg? Lolburg.

GOSPLAN HERO's picture

USA is the land of wideload chicks.

bigdumbnugly's picture

yep.  babe of the day.

unquestionably nailable and her hair remains perfectly coiffed even under water.

Spastica Rex's picture

She possesses built-in flotation devices, too. Wow.

bigdumbnugly's picture

almost enough to make even bawney frank go hetero.

sqz's picture

Well, that must have scuppered a few plans! The EFSF AAA (CDO-like) rating makes it look like a zombie, even before it could be "expanded"!

achmachat's picture

if you downgrade the place with the highest per capita GDP in the world... what are you supposed to do with all the rest????

Johnny B Good's picture

Nothing, because its not founded in reality anyway.

Just propaganda Bullshit to misdirect from the fact that the US and UK are bad ass broke.

But dont worry they'll go down the drain soon, not the euro, and their phony minion rating agencies with them.

Really all rating agencies are american, do you honestly believe they will realistically downgrade US ratings ? Dream on.

Small test: You get to make a list of people who get money. First place gets 1000$, Second 500$, Third 250$ etc.

How likely is it that your own Name is on place One ? Exactly.

r101958's picture

The ratings agencies are now the cattle prod of choice for TPTB to use against countries and pols that will not immediately effect the desired changes or institute the desired policies. Typical carrot and stick psychology. All this in an effort to create one centralized EU government.

Hard1's picture

Earth has been just downgraded by the Stellar and Planetary Ratings (S&P), a MRSO (Milky way Recognized Statical Organization) to triple Zed minus outlook negative.  Saturn has outlook positive as the new methodoligy consideres that lack of life is better than lack of intelligent life.

WonderDawg's picture

You're probably on the right track. The ratings agencies definitely have a less than pure motive for this. Who stands to gain if S&P drops the ratings? What would likely be the reaction and who benefits? If you can figure that out, you can make the right play. I'm just not sure I can accurately anticipate the reaction and how to position myself.

1000pips's picture

Already baked in. No big deal. S&P does not matter. Euro/USD to $1.40 in a couple of weeks. Enjoy the holidays with your family. Everything is set up for 2012 to be a HUGE years for the markets. May even set new highs. Trade accordingly.

barliman's picture



Rahm?  Is that you? Sheeeeeeit ...I almost didn't recognize you without you dropping the F-bomb.

Don't let me distract you from distracting - be cool.


mayhem_korner's picture



Is it mandatory for trolls to have the red-white-and-blue, Robo-Hamy?

1000pips's picture

Any one who post the truth on this site is called a 'troll', the market has almost doubled in 3 yrs. All this time you chicken little fools have been posting 'the sky is falling'. You must almost be broke now, shorting this market is a suckers move--but hey, maybe you dumb asses like that. Peace on earth, Dow to 15,000 in 2012.

RichardENixon's picture

If the Dow goes to 15,000 in 2012 it will be about 500 points higher than when stupid fucks like you went all in back in 2007.

Teamtc321's picture

1000, I suggest you take a look at this interview with Mr. Bass.


Enjoy if you havn't yet viewed the clip. 

cranky-old-geezer's picture



Your rising Dow came at the expense of debasing the US dollar 1/3 since '08.  You stock bulls never talk about that. 

barliman's picture


"Any one who post the truth on this site is called a 'troll', the market has almost doubled in 3 yrs."

Troll ... no.

Truth .... usually takes more than a snippy soundbite ... and on ZH your credibility takes time to be established. Spouting "green shoots" propaganda regarding markets, economies and sovereign states is a guaranteed method to demonstrate your ignorance beyond all doubt.

Besides, you'll be much happier getting back to WoW than you will be hanging around here.


P.S. Tyler, much as I hate to say it - can we bring captchas back to weed out the illiterate?

He_Who Carried The Sun's picture
In Which S&P Says France May Get Two Notch Downgrade  WHICH IN TURN WILL LEAD TO QUICK AND PROMPT DEMISE OF ALL S&P managers, who still need to get a life after failing each and everybody in 1999, and in 2008!
They should be hung by their nostrils! lol
Marcuz Aurelius's picture

That was what ? a Half-life of 4 Hours for the Eurocrats ?

GeneMarchbanks's picture

S&P: We may cut you!

Vlad's picture

Belgium should already be cut.

cossack55's picture

Belgium gets a minor boost for not having a gubmint.  The US would be back to AAA if we disband our criminal gubmint.

Whats up with the cancelled Czechs?

bank guy in Brussels's picture

In fact, in Belgium we do now have a government, after 541 days. Our good King of the Belgians, Albert II, has just appointed it after the successful coalition negotiations were completed.

Our new Prime Minister, Elio di Rupo, is quite a good chap. He is of Italian heritage, a gay man, and the leader of the French-speaking Socialist Party in Belgium. He is charming and looks quite dapper in the bow tie he usually wears, but perhaps some Americans will not quite like his profile.

Americans are probably not quite ready for a gay socialist as head of government, but Mr di Rupo is quite all right with us here in Belgium.

Words and meanings: Americans use 'socialism' to mean something like 'fascism', which they greatly suffer, whereas here we use 'liberal' as someone who has strong free-market views.

Too bad Americans have never really experienced government working well, and giving just about every citizen a good life, like we have here. And Americans get sadly distracted from their real enemies, by anti-gay, anti-Muslim, anti-Mexican, and other bigotries.

knukles's picture

Never fear, Barney Frank's here.

Johnny B Good's picture

Who cares ?

Whats the name of the mayor of Washington D.C. ?

Belgium is a neutral ground where the government of the EU is located so that no nation (of importance) can claim to rule europe.

Test it youself:

"Belgium is the ruler of Europe!"

Sounds funny doesn't it ?

As a matter of fact, Belgium was founded in the 19th century as a neutral ground / battlefield for Europes great powers so they don't have to scorche their own land in minor conflicts and have a nice background for parleys.


GoodMorningMr.VanRumpoy...'s picture


Belgium is a case example of the fallacy and failure of the concept of multi -culturalism.

Belgium has largely devolved into two separate nations under one flag,

In the north The Dutch-speaking Flemish Community people of the Flanders region


French-speaking  people of the Walloon region in the south. 

The two different ethnic groups have been feuding and that’s why it took a full 1 year and ½ to form a government.  Even the road signs are written in different language depending on the region.

Most likely the entity known as “Belgium” will   fall apart once they are forced to institute austerity and have to fight over which region takes the biggest hit.


Black Forest's picture

Whats up with the cancelled Czechs?

They have never been part of the eurozone, their currency is CZK.

hugovanderbubble's picture






Just ANTWERP has any potential value as a big harbor....

BELGIUM will be splitted into 3 Yugoslavia...and in a couple years Spain...NEOBALKANIZATION COMING (in belgium and spain...and who knows in more euro FISCAL HARMONIZATION IS AN ODYSSEY...UTOPIA

redpill's picture

Please keep your hands an arms inside the boat at all times, and enjoy your ride on The Downward Spiral (tm)!


bigdumbnugly's picture

the final thrill ride for all turds.

SheepDog-One's picture

So in other words theyre trying to scare the ECB into printing?

GeneMarchbanks's picture

Of course. Austerity... was tried. Fail. See Greece.

Nothin' left...


Vincent Vega's picture

Perhaps they are just trying to give that apperance, Sheep. Perhaps this is all part of the script to give cover to Fed to print. Who knows any is all so FUBAR.

SheepDog-One's picture

I dont know who they have to hide from or fool in order to print....who is there to stop them?

Vincent Vega's picture

Good point...I breifly thought Congress but they are impotent.

bigdumbnugly's picture

is that ebonics for important or did you mean utterly useless?

centerline's picture

It's about placing the blame - redirection.  Politicians take the next hit.  Then people will take the ultimate and final hit.  That should work wonders for divide and conquer as well.  In this case, divide and liquidate.  Public versus private, haves versus have not, political party A against political party B, young versus old, cat owners against dog owners, prego versus ragu, etc.

vote_libertarian_party's picture

That is my question.  What is considered negative?


If they (Euroland) all agree to print a Trillion Euros in funny money and push defaults out 2 years is that good?


If they say no to printing, no more new debt but there are a lot of bond write offs is that good because they would finally be improving the situation (after the write-offs, theoretically)

Matt1973's picture

who cut the cheese ?

JPM Hater001's picture

I think it was Nigel Farage.  Well, first smelt first delt?

hugovanderbubble's picture

No Cheese for bad mouse...


AND WHEN UK WILL BE DOWNGRADED???????????????????????????????'

txsilverbug's picture

This would be that expensive swiss cheese right?  Not that fake ass french cheese..

txsilverbug's picture

Who gave S&P their scissors and balls back?

knukles's picture

Why not save time and just state that "All the European countries who have been recently decribed as fucked will be cut."