NEW YORK (CNNMoney) -- Standard & Poor's said Friday that it has downgraded the credit ratings of nine euro area governments, including AAA-rated France and Austria.
S&P lowered its rating for Italy, Spain, Portugal and Cyprus by two notches. The move means Italian bonds are now rated BBB+, dangerously close to the junk bond level that could make it even harder for the government to raise money.
France and Austria both had their top-tier credit rating lowered by one notch to AA+, said S&P. But Germany, Finland, the Netherlands and Luxembourg all maintained their AAA ratings.
S&P cut the ratings of Malta, Slovakia and Slovenia by one notch.
I am frequently stunned how the arguments used in the American Political Shooting Match to define the reasons why an negative point in the United States don't fit when the same things happen in a more international scope. The recent downgrade of certain fragile European nations prove this point.
When the United States suffered a downgrade of its credit rating a few months ago it was attributed to the political stalemate surrounding the 'Debt Ceiling Deal'. As we look at the 9 European nations that just got dinged - it should be noted that many of them have a larger debt to GDP ratio than does the United States. It is also true, however, that the US Debt is far larger from a numerical stand point. But for the perceived safety in the USA as an investment repository - we would be screwed as our government's attempt to finance its debt is rejected by the market - until the returns outweigh the risks.