Home Business News Shattered confidence as 15 Euro countries face downgrade

Shattered confidence as 15 Euro countries face downgrade

6th Dec 11 12:46 pm

The eurozone’s ratings threatened by Standard & Poor’s.

Germany, France and 13 other member of the eurozone face having their credit ratings downgraded by Standard & Poor’s, plunging the single currency into a deeper crisis.

The credit ratings agency has put all but two of the nations which use the euro on credit watch. The only two nations not to be added to the list are Cyprus, which was already being reviewed, and Greece, which holds the worst rating in the world. Standard & Poor’s move comes as a further blow to leaders who are desperately trying to add stability to the eurozone and avoid the break-up on the single currency.

German chancellor Angela Merkel and French president Nicolas Sarkozy held emergency talks in Paris on Monday and renewed their call for an EU Treaty change to end the currency crisis. The two leaders said they would ideally like the change to be agreed by the EU’s 27 member states, but would be prepared to proceed with just the 17 eurozone countries. Changes to the treaty could see tougher rules and sanctions governing to eurozone to help reassure the market of the currency’s stability.

Any treaty changes will cause new problems for prime minister David Cameron, who will face fresh calls for a referendum on the European Union from eurosceptic Conservatives. However, Downing Street insisted the scale of the proposed changes to the treaty did not warrant a referendum in the UK.

But Iain Duncan Smith, the work and pensions secretary, suggested any impact from a change in the treaty would be grounds for a national vote. He said: “The prime minister has always been clear, if there are substantial changes that affect Britain’s position, then he would go for a referendum because that’s what we said to the British public we would do.”

Cameron, who will travel to a European Council meeting in Brussels later this week, said nothing had altered to the point of justifying such a move. He said: “If there is a treaty at the level of 27, and if that passed powers from Britain to Brussels, there would be a referendum. We have legislated now so that it is impossible for a British government to pass power from Britain to Brussels without asking the British people in a referendum first.

“As prime minister I am not intending to pass any powers from Britain to Brussels, so I don’t think the issue will arise. But the British people should know that, as an absolute safeguard, if power goes from Britain to Brussels they get a say-so first, and quite right too.”

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