US ratings agency Standard and Poor’s continued to ratchet up the pressure on EU leaders on Tuesday.
As well as threatening to slash credit ratings across the euro zone it has put the European Financial Stability Facility on negative watch. Its logic is that the facility’s performance depends on the creditworthiness of six AAA rated countries that could be downgraded.
They include France, Germany, Austria, the Netherlands, Finland and Luxembourg.
S&P recognises that the accord reached between Germany and France could mean that certain euro zone states will avoid a credit downgrading.
The German Finance Minister, Wolfgang Schaeuble, said S&P’s warning is a way of forcing Europe to act: “The warning by Standard and Poor’s is not based on real economic data in the AAA countries but on the insecurity in the financial markets about the euro zone as a whole. In this respect we take this assessment as further reassurance to do everything to achieve a good result on 9 December.”
A “good result” could well involve closer fiscal oversight of the euro zone. In a report seen by news agency Reuters, which is to be discussed at Friday’s summit, European Commission President Herman Van Rompuy says such a policy could be enabled through minor, rapid adjustments to existing EU treaties.