After a week end of uncertainty following the downgrade of France by Standard & Poor's, markets throughout Europe seem to have held firm. Along with France, the downgrade has hit other European countries of the likes of Austria and Italy, while the situation in Greece seems like it's getting every day worse, with speculations that Greece, by not being able to pay off its £12 billion bond by March 20th, will probably default and leave the single currency.
The decision by Standard & Poor's to downgrade 9 countries from the Eurozone (Spain - A, Portugal - BB, Slovenia - A+, Italy - BBB+, Austria - AA+, France - AA+, Malta - A-, Slovak Republic – A, and Cyprus - BB+) has been highly criticised by many as this move appears to aim at creating further instability and uncertainty, with the Euro reaching another record low. The news, which was in part expected, has created a wave of discontent especially among youngsters, who refuse the idea of being so much affected by this United States-based financial service company.
In the meanwhile, Germany has managed to keep its AAA, even though, amidst the economic difficulties that have hit Europe, it could be expected to be downgraded very soon, dragged inside the crisis by the rest of the Euro zone. French PM François Fillon , in a press conference, has tried to downplay the rating decision saying that French people should not panic, as the decision was well expected and that reforms will make sure that the national debt will be reduced.
Behind the decision announced by Standard and Poor's to downgrade a big slice of European countries must be searched in the unsatisfactory measures that Europe has taken in the last few months, aimed, according to the financial service company, only at cutting down debts and overall spending without dealing with the key issue of sustainable growth that could create new jobs and consequently stop the relentless rise of unemployment rate.
In the meantime, the Euro is experiencing tough times, with the Euro – USD conversion rate showing another low at 1.27 with no sign for a recovery in the short and medium term.