STOCK MARKET WATCH - Thursday, 5 January 2012

[Ghost Dog]

18. Paris and Berlin eye end of triple-A era

(Reuters) - The German and French governments have both come to accept that the era when leading euro zone countries enjoyed the very best sovereign debt ratings is nearing an end, but a downgrade could shake Paris far harder than it does Berlin.

Markets have been bracing for a cut in the triple-A rating of France and possibly other top-rated euro zone members since Standard & Poor's warned in early December of a mass downgrade due to concerns about the bloc's two-year old debt crisis.

Such a move in theory makes it more expensive for countries to borrow, ruling out buying by certain types of investors as well.

If S&P were to follow through in the coming weeks and slash euro zone ratings across the board, economists say the financial and political backlash would be tolerable, as it has been for the United States since the rating agency controversially cut its debt last August.

But if France suffers a downgrade before Germany, as another rating agency Fitch has suggested, the level playing field that has existed between Europe's two biggest economies could be disrupted...

/... http://uk.reuters.com/article/2012/01/04/uk-europe-rating-idUKTRE8030XG20120104