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Credit risk heightens stakes in eurozone

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Credit risk heightens stakes in eurozone


European leaders are under yet more pressure after Standard and Poor’s announcement that 15 eurozone countries face having their credit ratings downgraded.

The announcement on Monday evening came just hours after France and Germany laid out their master plan to solve the sovereign debt crisis.

The move comes as talks between leaders continue ahead of Friday’s European Union summit in Brussels.

Speaking ahead of the meeting French Finance Minister Francois Baroin said: “The announcement yesterday putting the eurozone under surveillance did not take into consideration the Franco-German proposals, so this week is important. The change in France’s rating and the other countries will largely depend on the quality and importance of Friday’s agreement at the summit.”

Standard and Poor’s has put the 15 countries on what it calls “CreditWatch”. Under the spotlight are six members with triple A status. They are France, Germany, Austria, Finland, Luxembourg and the Netherlands.

The French-German plan was welcomed by the markets but one stated reason for Standard and Poor’s announcement is continuing worry over disagreements between European leaders on how to tackle the crisis.

The White House is worried too. US Treasury Secretary Tim Geithner is making his own grand tour of European leaders this week.

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