The eurozone was dealt a fresh blow as Moody’s Investors Service downgraded the region’s rescue funds and unemployment hit a new record high.
The ratings agency cut its rating on the European Stability Mechanism to AA1 from AAA and maintained a negative outlook. It also lowered the European Financial Stability Facility’s provisional rating to (P)AA1 from (P)AAA.
Moody’s said its decision was driven by its recent downgrade of France, because the credit risk and ratings of the rescue funds were “closely aligned to those of its strongest supporters”.
Klaus Regling, managing director of the ESM and chief executive of EFSF, said Moody’s decision was “difficult to understand.” He added: “We disagree with the rating agency’s approach which does not sufficiently acknowledge ESM’s exceptionally strong institutional framework, political commitment and capital structure.”
It came as the EU’s statistics office said eurozone unemployment rose to 11.7pc in October from 11.6pc in September.
The Telegraph
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