(MENAFN- Qatar News Agency) The rating agency Moody's announced Wednesday that it was putting a negative outlook on the European Union's main bailout fund.
Formed two years ago to rescue Eurozone governments unable to borrow sustainably in bond markets, the European Financial Stability Facility retains its top Aaa rating from Moody's.
The change in outlook from stable to negative indicates that the agency is considering a downgrade of the fund's credit rating if adverse conditions persist.
The outlook change for the bailout fund is a direct consequence of Moody's decision on Monday to put negative outlooks on the still-Aaa-rated bonds of Germany, the Netherlands and Luxembourg.
The London-based agency justified those negative outlooks by citing the "increasing likelihood" of rescues for Spain and Italy, which would fall on the currency area members with stronger balance sheets, as well as the risk of budget and economic impacts if Greece departs the Eurozone.
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