Register | Forgot Your Password? | Close

BERLIN (AP) - Rating agency Moody's has stripped the eurozone's new (EURO)500 billion ($615 billion) bailout fund of its top credit rating.

Moody's announced Friday to downgrade the European Stability Mechanism's long-term debt rating from AAA to Aa1, maintaining a negative outlook.

The agency said its decision was driven by its earlier downgrade of France. The eurozone's second-largest economy guarantees a sizable part of the ESM's loan capacity.

ESM chief Klaus Regling called the decision "difficult to understand," saying it does "not sufficiently acknowledge ESM's exceptionally strong institutional framework, political commitment and capital structure."

The ESM- one of the 17-nation eurozone's key tools in fighting off its debt crisis- continues to be assigned a top-notch long-term rating by Fitch. Moody's and Fitch also see the fund's short-term credit rating as AAA.


(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
share this story:
Attention KTAR.com Comment Users: We have recently changed our comments boards.
We would like you to be part of the conversation and The Voice of Arizona by logging in with your Facebook, Twitter, Google+ or Disqus account. Existing KTAR (Arizona Sports) account members will need to create a Disqus account or use one of the aforementioned social media logins. Thank you.
comments powered by Disqus