• The credit rating agency Standard & Poor's downgraded the ratings of nine countries on Friday. For France and Austria, theirs was brought down from AAA to AA +.
• Lower credit ratings for several euro area countries that previously had top marks is a serious blow to the euro zone's emergency fund EFSF, whose ratings are also at risk.
• The fund, which accounts for emergency loans to crisis countries, Ireland and Portugal, is also expected to play a crucial role in the second aid program to Greece, which is required if the Greeks should not be forced to suspend payments.
• Large countries' credit ratings are particularly important, as they conform to the model that will account for most of the EFSF-guarantees.
• A lower credit rating means also that individual countries' bond yields rise, which in extreme cases (as for Greece, Ireland and Portugal) means that countries can no longer finance themselves on their own.
By Scancomark.se Team