In a document issued today entitled “Moody’s: Euro Area Sovereigns Remain Under Pressure In Absence of Decisive Initiatives” the big ratings agency said
In view of the continued absence of decisive policy measures despite the recent euro area summit, Moody’s Investors Service is reiterating its intention to revisit the ratings of all EU sovereigns during the first quarter of 2012. As Moody’s had stated in November, this is because the absence of measures to stabilise credit markets over the short term means that the euro area, and the wider EU, remain prone to further shocks and the cohesion of the euro area under continued threat.
Put another way, the EU’s plans, presented late last week, to right the sovereign paper problem is not adequate to end the concerns of Moody’s. Much of the balance of the financial world has reacted the same way. Investors see too little involvement by the IMF. They also see the ECB willing to help banks but not foreign nations–which they cannot do based on treaties. And, the new funds facility is not enough to cover a default of Italy
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