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Moody's gives EU negative credit rating

Sept. 4, 2012 at 1:51 PM   |   Comments

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BRUSSELS, Sept. 4 (UPI) -- Moody's Investors Service Inc. Tuesday gave the European Union a negative credit rating, citing a possible "weakening of commitment" to the EU by member states.

As European leaders held high-level talks on the region's debt crisis, Moody's said there had been a "deterioration of the creditworthiness of EU member states."

"Additionally, a weakening of the commitment of the member states to the EU ... would be credit-negative," Moody's said.

EU President Herman van Rompuy met with German Chancellor Angela Merkel Tuesday, The New York Times reported. Van Rompuy was scheduled to meet separately this week with Greek Prime Minister Antonis Samaras and French President Francois Hollande, both of whom traveled to Berlin last week.

Greek Finance Minister Yannis Stournaras was scheduled to meet this week with German Finance Minister Wolfgang Schauble.

The discussions will center on Greek's request for an extension on repayment of $200 billion Athens has already received out of $300 billion the international community has pledged to loan to Greece if it meets fiscal targets. The European Central Bank, the International Monetary Fund and the European Commission will report this month on Greece's progress meeting the targets.

Merkel has praised the Greek government for its efforts to bring its budget into line. She said last week one of her goals is to keep Greece in the Eurozone.

A second major discussion point is ECB President Mario Draghi's recent comment that he would be comfortable having the eurozone's central bank buy three-year government bonds.

The ECB has previously said it would buy government bonds under the stipulation that the countries first request help from the European Stability Mechanism, the international funding facility developed to help debt-burdened eurozone countries.

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