Germany’s AAA rating under threat

It was really only a matter of time; we’ve been relying too much on German coffers to keep Europe’s struggling nations (in particular Greece and Spain) afloat.

However, now its much coveted AAA rating has been classed as “outlook negative”, meaning they’re on the edge of being downgraded.

It’s all tied to the ever increasing liklihood that Greece will exit the euro and that Spain might be looking for a full bailout.

Spanish banks are reported to be sitting on losses as eye-wateringly high as €180bn. It looks like they’ll be borrowing an initial €30bn to prop up the banks until September when they’ll decide how much of a €100bn bail out they’ll accept. Scary stuff.

So now Germany is following France, Austria, Netherlands and Luxembourg who are also on a negative outlook.

Adam Mayer asks the question on everybody’s mind:

#Germany‘s #AAA rating under threat… how long will they continue fueling more #EU #bailouts? bbc.co.uk/news/business-…

— Adam Mayer (@adam_mayer) July 24, 2023

Despite the gloom for Germany, some people aren’t confident in Moody’s. Who rates the ratemen?

Moodies really doesn’t have any credit worthiness themselves, they are just a glorified analysts #germany #AAArating — Patrick May (@confusdeconmist) July 24, 2023

 Peter Spiegel, the Brussels bureau chief of the Financial Times has a slightly more tongue-in-cheek perspective:

Summer arrives in Brussels! Warmth! Sun! Blue sky! What could possibly go wrong? #Spain #Greece #Moodys #etc — Peter Spiegel (@SpiegelPeter) July 24, 2023

And Max Keiser, the financial meltdownist at Russia Today has a solution to the Spanish problem:

Spain should bring back bull fighting, but with banksters instead of bulls.

— Max Keiser (@maxkeiser) July 22, 2023

Okay, we don’t want to make too much light of what is a very serious situation.

Germany was always been viewed as the financial powerhouse of Europe and if it can fall onto the credit rating chopping block, things for the rest of us don’t look so good.

Are you worried that Germany will lose its AAA rating? What will be the impact on the UK and the rest of Europe? Tell me what you think in the comments below.

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1. Improving Your Personal Credit Rating