Moody's sends warning shot to six 'triple A rated' Euro Group nations!

The whole essence of last week's latest fudge from the Eurozone leaders was that they would stand behind all the debtor nations within the entire group of seventeen ex-nations. This morning Moody's has taken them at their word and warned of the inevitable consequences. The FT has the report in its Capital Markets pages, linked here. A brief quote from there is the following:

....it also warned that, in spite of reducing contagion in some ways, last week’s set of measures to shore up the eurozone could lead to downgrades of the creditor countries because of the precedent for future bail-outs. That would spell bad news for the likes of Germany and especially France, which some investors had already worried could be downgraded from its triple-A status.

So far Moody's has been silent on whether the package agreed last week, esitmtated to result in a haircut of 21% for banks on their Greek bonds creates a default. Whether this will same figure will apply on bonds of Ireland and Portugal, whether it will trigger payment of credit default swaps AND of course whether the USA will further increase its already stupendous borrowing limits, should become clearer as the week progresses. Interesting times indeed, this blog will, as usual, keep an eye open and post the developments perhaps not immediately noted elsewhere!