Germany Remains Stability Anchor
Enlarge image (© picture alliance / dpa) The ratings agency Moody's confirmed its highest credit rating for Germany, even if it lowered its outlook for the largest economy in the euro zone to “negative” based upon continued risks in relation to the European debt crisis. The ratings agency similarly lowered the forecast for Luxembourg and the Netherlands.
Germany's Federal Ministry of Finance noted the opinion. The risks to the euro zone enumerated by Moody's are anything but new, however. In addition, the agency's appraisal rushes provisory, short-term risks to the fore while leaving the longer term indications of stability unmentioned.
“The euro zone has already set a number of policies in motion that will steer it to sustainable stabilization. Germany alone remains on very solid footing both economically and financially,” said Federal Minister of Finance Wolfgang Schäuble. Trust on international finance markets is also high, something reflected by the still low refinancing costs of German bonds.
Indeed, in the Moody's report the credit rater lists a slew of reasons for Germany's continued pristine, AAA credit rating, including that its “creditworthiness is underpinned by the country's advanced and diversified economy and a tradition of stability-oriented macroeconomic policies.”
Furthermore, Germany will likely meet its medium-term fiscal policy goals already in 2012, and expects a balanced budget by 2014. Capitalization in the banking sector clearly improved, and the outlook for economic growth in Germany is still strong.
“If even Germany loses the highest rating, then the second-highest rating becomes the best one,” Norbert Barthle, the budget spokesman in parliament, said according to BusinessWeek. “All the agencies do is compare. It’s not that worrying.” A number of experts and policymakers similarly shrugged at the news, including Jean-Paul Juncker, president of the euro group, who affirmed commitment to the euro bloc, pointing to the internal stability of the three countries with lowered outlooks.
Through sturdy policies, Germany will maintain its safe-haven status, thereby continuing to anchor even the most bracing gusts within the euro zone. And, together with its partners, Germany remains committed to doing everything to overcome the euro crisis as soon as possible.