THE NEW YORK TIMES: BRUSSELS — Even as Europe’s leaders were praising the Irish government’s deficit-cutting efforts, the country received a dramatically different verdict Friday from a credit rating agency: a steep downgrade and a warning of more to come.
Having pledged late Thursday to do “whatever is required” to contain the debt crisis and defend their embattled currency, European Union leaders reconvened for the final day of a summit meeting. In the draft of a closing statement, the leaders welcomed the “impressive progress” in Dublin toward meeting the stiff conditions set for its recent bailout, including adoption of steep budget cuts.
Moody’s Investors Service had a different assessment, however. It cut Ireland’s credit rating by five notches to Baa1, with a negative outlook, from Aa2 and said further downgrades could follow.
The downgrade represented a further blow for a county that has enacted deep austerity cuts — and it is likely to raise questions about whether the rating agencies are exacerbating the efforts of struggling euro countries to emerge from the crisis. >>> Stephen Castle and Matthew Saltmarsh | Friday, December 17, 2010
