Money & Company
Tracking the market and economic trends that shape your finances.
November 27, 2011 | 9:43 pm

Throwing more logs on the Eurozone fire, Moody’s Investors Service said early Monday that the continent’s debt crisis now is “threatening the credit standing of all European sovereigns.”

That’s a not-so-subtle warning that even Moody’s top-rung Aaa ratings of countries including Germany, France, Austria and the Netherlands could be in jeopardy.

In a report from London, Moody’s painted a despairing picture of the choices European governments face as investors have grown increasingly fearful of buying Eurozone countries’ bonds, thereby driving up market interest rates to prohibitive levels.

The firm said its “central scenario” remains that the euro area will be preserved without widespread bond defaults. But policy moves to keep the Eurozone intact “may only emerge after a series of shocks, which may lead to more countries losing access to market funding for a sustained period and requiring a support program,” Moody’s said.

“This would very likely cause those countries’ ratings to be moved into speculative grade,” meaning “junk” quality, it said.

Moody’s currently has junk ratings on bonds of Greece, Ireland and Portugal, all three of which have gotten European Union bailouts in the last 18 months.

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