Despite the deal reached by European leaders to strengthen the euro zone, Moody's warned today that the crisis is still at a "critical and volatile stage" and that some European Union countries could still find their sovereign ratings downgraded. It expressed specific concern about the expanding growth gap between the wealthier northern euro zone countries and their weaker southern counterparts. "Moreover, the longer the incremental approach to policy persists, the greater the likelihood of more severe scenarios, including those involving multiple defaults by euro area countries and those additionally involving exits from the euro area," said Moody's.
Standard & Poor's issued a similar warning last week, and could announce its assessment as early as this week, the New York Times notes. Specifically, S&P said Germany and France could find their credit ratings lowered and other countries' credit scores could be cut. Any downgrade could further inflame Europe's financial crisis. (Read more Standard & Poor's stories.)