Rating Agencies: European Leaders Should Have Done More

Posted December 12th, 2011 at 2:45 pm (UTC-5)
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Two international credit rating agencies say Europe’s leaders should have done more to solve the economic crisis growing out of massive government debts.

On Friday, all 17 countries that use the euro and many non-euro EU members agreed to a plan that includes more central oversight of countries’ budgets. It is an effort to keep them from running up the huge debts that caused an economic crisis in Europe and worries for the global economy. Britain opposed the plan and refused to join.

Fitch Ratings called Friday’s summit agreement an “incremental” approach to the area’s financial problems when a comprehensive solution is needed. Rival rating agency Moody’s said Monday the lack of “decisive” policy measures means it will continue reviewing the creditworthiness of European countries. The agency says “the euro area, and the wider EU, remain prone to further shocks.”

European Union members Greece and Italy have been trying to cut their government debt by slashing spending. Cuts to Italy’s pension programs prompted demonstrations and strikes in many areas of the nation on Monday.

In Greece, officials held meetings on Monday with international officials regarding a second bailout for the troubled country. They also spoke with private lenders who hold the nation’s bonds who may face a loss of 50 percent of their investment.