Moody’s Investors Service on Monday lowered its ratings outlook for the European Union from stable to negative, as the bloc struggles to deal with the eurozone debt crisis.
The credit rating agency said the negative outlook on the EU’s long-term rating reflects the negative outlook for Germany, France, Britain and Netherlands, which together account for almost half of the EU budget revenue.
But Moody’s maintained the bloc’s triple-A rating, citing its “conservative budget management” and “the credit worthiness and support provided by its 27 member states.”
The four key members also maintain a triple-A credit rating.
The agency did not exclude the possibility of a future downgrade if a “deterioration in the credit worthiness of EU member states” should prompt such a move or an upgrade if the situation improves.
In July, Moody’s changed its ratings outlook to negative for Germany, the Netherlands and Luxembourg, citing uncertainty about the eurozone’s debt crisis.
Germany has Europe’s strongest economy and finances most of the bailout given to struggling EU members Greece, Portugal and Spain.
European leaders are stepping up shuttle diplomacy this week in an effort to stabilize the common currency used by 17 member nations.
Among others, EU President Herman Van Rompuy will meet with German Chancellor Angela Merkel in Berlin this week as Italian Prime Minister Mario Monti welcomes French President Francois Hollande in Rome. Leaders will also look into bringing down borrowing costs for heavily indebted member nations.