15 eurozone nations face credit downgrade threat
BRUSSELS - Standard & Poor's is threatening to downgrade the credit rating of 15 eurozone countries, saying the worsening debt crisis is affecting the bloc's strongest economies.
The decision Monday to put 15 eurozone countries, including AAA-rating nations such as Germany and Luxembourg, on watch for a possible downgrade piles pressure on eurozone leaders to find a solution to the currency union's debt troubles at a summit later this week.
S&P said its decision was "prompted by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole."
The only two euro nations not put on credit watch were Cyprus, which was already under review, and Greece, which already holds the world's worst rating.
Meanwhile, the leaders of France and Germany called for changes to the European Union treaty so that countries using the euro would face automatic penalties if budget deficits ran too high.
Stock prices rose and borrowing costs for European governments dropped sharply. Investors viewed the Franco-German proposal which will be debated at a European Union summit Friday as an important first step in an emerging plan to save the euro.
Implementing treaty changes could take months, but a commitment to tighter coordination could open the way for further emergency aid from the European Central Bank, the International Monetary Fund or some combination.
"Our wish is to go on a forced march toward re-establishing confidence in the eurozone," French President Nicolas Sarkozy said at a press conference alongside German Chancellor Angela Merkel. "We don't have time. We are conscious of the gravity of the situation and of the responsibility that rests on our shoulders."
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