EFSF threatened with downgrade
Wednesday 25 July 2012
The European Financial Stability Facility (EFSF), the fund being used to bail out Greece, Ireland and Portugal and to finance a Spanish banking rescue, is being threatened with a possible downgrade by Moody’s rating agency. The news comes on the back of downgrade warnings for Germany, the Netherlands and Luxembourg as they foot the bill for increasing numbers of their Southern neighbours. Moody’s said in a statement, on 25 July, that there was “an increased likelihood that the EFSF might be downgraded over the next 12 to 18 months”. EFSF chief Klaus Regling said that the fund is a “well-established and trusted issuer” despite volatile market conditions. The EFSF has seen yields drop in recent months after they spiked on the back of downgrades of France and Austria by Standard & Poor’s in January.