S&P Poised to Slash Euro Zone Ratings

 

The Globe & Mail is reporting that Standard and Poor’s will downgrade credit ratings for several euro zone countries today, including France and Austria.

 

The two nations will lose their AAA+ ratings and revert to AA+, and one euro zone official says Slovakia will also be affected in the downgrade announcement. 

 

The news is prompting doomsday-type headlines, such as “A false dawn: The recession has been mild … but things are likely to get much worse” and polls such as “Will the euro survive 2012 intact?”

 

Is it really all that bad?

 

European stock markets soured and the euro’s value dropped more than a cent as an immediate reaction to the news.

 

Yes, Europe seems far away, and Vancouverites probably feel removed from all the credit-rating hullabaloo. But as Europe creeps closer to a recession, Canadians should stay wary.

 

In the words of our own Tony Wanless, “… as much as we might think we are, no one is separate anymore. If the euro goes down, it will be a financial shock that will reverberate around the world.”

 

Couldn’t have said it better myself.