S&P threat to deliver shock for eurozone
Jean-Michel Six, chief economist of the agency that shocked financial markets last week by putting 15 eurozone countries on a watch for a potential downgrade, said last week’s EU summit agreement was a significant step forward, but not enough.
S&P usually takes around three months to act after a warning, but has said that in this case it may do so more quickly.
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Hide Ad“There is probably yet another shock required before everybody in the eurozone reads from the same page, for instance a major German bank experiencing some real difficulties on the markets, which is a genuine possibility in the near term,” Mr Six said.
“Then there would be a recognition that everybody is indeed on the same boat and that even German institutions can be affected by this contagion. I’m afraid this may still be required.”
Twenty-six EU countries – all minus Britain – agreed on Friday to go forward with further and deeper economic integration.