Ratings agency blames ratings
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Ratings agency blames ratings

Interesting note from Fitch where it highlights the main "challenges" ahead are a result of half of the European countries being at risk of being downgraded


Ahead of Fitch Ratings' annual series of European Credit Outlook event, the credit ratings agency released some choice notes on sovereigns, banking, structured finance and covered bonds.


However, the key quote that took Euromoney's eye was this:




"With Eurozone countries needing to borrow approximately two trillion euros in 2012, the sovereign credit and economic challenges the region faces this year are underlined by the fact that more than half of that debt is by governments at risk of rating downgrades," said David Riley, Group Managing Director and Head of Fitch's Sovereign Group.



Furthermore,  Riley added:



"The ability for countries to generate sustained economic growth this year will be a key issue, with Fitch forecasting a shallow recession for the Eurozone in 2012 as tough austerity measures continue to bite and consumer and business confidence remains weak.

The risk of a vicious cycle of stagnating economies fuelling worries over the solvency of some governments and banks is a real one. More positively, the unwinding of the imbalances that led to the crisis is well underway and the headwinds from deleveraging and austerity should begin to ease towards the end of the year, supporting a gradual economic recovery that could mark the beginning of the end of the crisis,"



- Euromoney Skew Blog



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