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EUROZONE DEBT CRISIS

DEBT CRISIS

S&P says France will maintain top rating

Standard & Poor's is confident France will maintain its top AAA credit rating, the agency's European chief said Thursday, amid rumours of a possible downgrade amid intensifying eurozone debt strains.

S&P says France will maintain top rating

“The rating for France is a stable AAA and that has been the case since 1975”, S&P Europe chief Carole Sirou told RTL radio. “We are confident on that rating,” she added, just days after the agency downgraded the US credit rating from AAA to AA+.  

She said she had no comment to make on rumours of a possible French downgrade linked to the lingering eurozone crisis which has triggered major market turbulence.  

In response to the French downgrade fears, Moody’s Investors Service and Fitch Ratings have both issued statements denying any such move was under consideration.  

Worries over French financial health mounted last week when bank shares plunged amid fears of their high exposure to Greek debt but a rebound later alleviated concern.  

S&P downgraded the United Stats’ long-term credit rating on August 5 amid concern over the country’s finances and the failure of US lawmakers to agree on a deal to reduce the ballooning US debt by some $4 trillion over 10 years.

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BUSINESS

Germany keeps stellar triple-A credit rating

Credit rating agency Standard & Poor's affirmed on Friday the top-notch triple-A rating for German sovereign debt, saying Europe's top economy could withstand any shocks from the eurozone crisis.

Germany keeps stellar triple-A credit rating
Photo: DPA

The ratings “reflect our view of (Germany’s) modern, highly diversified, competitive economy, and the government’s track record of prudent fiscal policies and expenditure disciplinem” S&P wrote in a statement.

“Furthermore, we believe the German economy has demonstrated its ability to absorb large economic and financial shocks.”

Germany is therefore one of a very select number of countries to enjoy the best possible credit ratings, alongside Finland, Luxembourg and the Netherlands.

S&P also affirmed its stable outlook for Germany’s rating, meaning no downgrade was expected.

Germany has held up better to the crisis than all of its neighbours, thanks to deep restructuring and painful reforms undertaken a number of years ago.

But it has not escaped completely unscathed and growth ground to a halt at the end of last year and the average annual growth rate this year would be much slower than the 0.7 percent seen in 2012.

Nevertheless, S&P said it was pencilling in growth of 0.4 percent in 2013 and “steady, albeit very modest, growth over the medium term, averaging close to 1.0 percent in real gross domestic product per capita terms in 2013-2016.”

AFP/kkf

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