Britain, France, Germany, US are 'well positioned': Moody's
Moody's Investors Service said Tuesday that Britain, France, Germany and the US are "well positioned" to keep their top ratings -- but with a lower "distance to downgrade" due to fiscal tightening.
The credit ratings agency added in a quarterly report that the four nations have retained their stable outlook, but it also warned that ongoing deficit-cutting measures could slow economic recovery.
"The Aaa ratings of France, Germany, the UK and the US continue to be well positioned based on a forward-looking assessment of their debt dynamics and debt affordability," the agency said in the report.
But it added: "The challenges linked to fiscal adjustments imply that the overall 'distance-to-downgrade' has been further reduced for each of these four countries."
The agency also noted the Spain's Aaa rating has already been placed on review for a potential downgrade, due to the weak growth prospects for its fragile economy.
Alexander Kockerbeck, Vice President and Senior Credit Officer in Moody's Sovereign Risk Group, said that Europe's biggest countries were all seeking to cut deficits amid financial market jitters over the eurozone debt crisis.
"Since the last issue of Moody's Aaa Sovereign Monitor, the debate on the optimal timing of fiscal tightening has effectively been brought to a close for the largest European Aaa-rated governments, as they are now all pursuing deficit reduction measures," Kockerbeck said.
"In the United States, a strategy for debt stabilization is still in the early stages of being developed."
© 2010 AFP