EU downgraded despite draconian cuts – again

Moody’s ratings agency has downgraded six EU countries and lowered outlook for three more after Greece passed a new austerity package. This isn’t the first time ratings have been downgraded on the heels of measures aimed at fighting crisis in Europe.

Moody’s downgraded Italy, Spain, Portugal, Slovakia, Slovenia and Malta and lowered its outlook for France, Britain and Austria to negative from stable. It says the downgrade is due to uncertainty over European Union financial reforms, the region's weak economic outlook and the resulting pressure on fragile markets.

However, downgrades appear to come only after EU countries take new steps to fight the crisis. Exactly a month ago, on January 13, another influential rating agency, Standard & Poor’s downgraded France and 8 other countries.

This came days after French and German leaders met in Berlin and agreed to sign a new “fiscal compact.” The pact would allow Brussels to take individual member states to court if they exceed a budget deficit of 3% of national GDP.      Read Here