Contentious Budget Talks Prompt S&P Downgrade of EU Credit Rating

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By Trey Thoelcke Published
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On Friday, the Standard & Poor’s ratings agency lowered its long-term credit rating on the European Union, citing threats to its cohesion and deteriorating creditworthiness of its 28 member nations.

The EU was downgraded to AA+ from AAA, though the outlook remained stable, and the downgrade does not affect the sovereign ratings of individual member countries. The agency maintained its short-term rating at A-1+.

The S&P said in a statement:

In our view, EU budgetary negotiations have become more contentious, signaling what we consider to be rising risks to the support of the EU from some member states. … The downgrade reflects our view of the overall weaker creditworthiness of the EU’s member states. We believe the financial profile of the EU has deteriorated, and that cohesion among EU members has lessened.

EU leaders are meeting in Brussels with the aim of reaching an agreement on a banking union that will prevent foundering banks from bringing down an entire economy. This comes more than four years after the outbreak of the European debt crisis, in which the EU had to offer emergency financing to members such as Greece, Ireland, Portugal, Spain and Cyprus in order to shore up their bonds and banks. National debt and bad bank lending had brought some of these countries to the verge of bankruptcy and wrecked important parts of the banking system.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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