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Germany, the Netherlands, and Luxembourg may have strong credit ratings, but that didn't stop Moody's from downgrading all three to "negative" yesterday, as the never-ending euro crisis continues to deepen, reports Reuters. The rating agency specifically warned about yesterday's threat by Germany to kick Greece out of the euro, saying the move would "set off a chain of financial sector shocks that policymakers could only contain at a very high cost."
With large economies like Spain and Italy needing giant bailouts, Moody's warned that the bulk of the burden will fall on Germany and Europe's other top-rated governments. Finland, however, maintained its "stable" rating. Spanish bond yields reached their highest level yesterday since the introduction of the euro, 7.565%, while German bonds fell to their lowest. "We are in a transitional period, and this transitional period could last for many years," warned an official at Moody's.
