EU’s Ratings Affirmed by S&P; Outlook Negative

The European Union had its long- and short-term issuer credit ratings of AAA/A-1+ affirmed by Standard & Poor’s Ratings Services, a week after the company cut the AAA ratings of France and Austria.

The outlook is negative because of “ongoing risks” for the Eurozone, S&P said. The long-term rating was removed from Credit Watch negative, where it was placed on Dec. 7.

The European Union’s revenues contributed by AAA-rated member states dropped to 33 percent of 2011 budgeted revenues from 49 percent before the Jan. 13 downgrade.

In last week’s review, Germany and Slovakia were only two of the 16 countries that were given a stable outlook.

“Nevertheless, in our opinion, the supranational entity known as the EU benefits from multiple layers of debt-service protection sufficient to offset the current deterioration we see in member states’ creditworthiness,” Frank Gill, an analyst with S&P in London, said in the statement.

The negative outlook corresponds to the negative outlooks on 16 of the 27 member states, according to the statement.

From: Bloomberg