I swear no one from Moody’s is on the distribution list, but they just got put on -ve watch by Moody’s. Seems like they mentioned, tough to get funding for weaker countries already, economic conditions deteriorating, making that problem more pronounced, and “uncertainty around the impact on the already pressured balance sheet of the government of additional bank support measures which are likely to be needed”.
I think this is a shot across the bow of France too. Though France is not a weak borrower, the other points seem to apply. Germany has been pretty steadfast in its resistance to a lot of these measures but France has put itself in the spotlight as potentially being imprudent with its balance sheet. I don’t think we are done with rating actions from Moody’s and S&P yet, and Europe does need to start taking into account they their “solutions to contagion” may actually be spreading it further and faster.
On the bright side, if any of the AAA entities gets downgraded, think of how much more money the rating agencies will make from helping structure and rate EFSF V3.5