Fitch affirms Germany AAA rating . Outlook stable

Discussion in 'Wall St. News' started by ASusilovic, Sep 20, 2011.

  1. Fitch affirmed Germany's top AAA credit rating on Tuesday but warned the economy still faces risks from the euro zone debt crisis.

    Fitch cited Germany's strong rebound last year, when its economy grew at a 3.5% rate, its falling jobless rate and a strong net investment position and said the rating outlook was stable.

    But the agency said a solution to the euro zone crisis, which has forced smaller countries to seek emergency aid and made it more costly to finance their debt, was needed to ensure future stability in the German economy.

    Germany is the euro zone's largest economy and has played a large role in funding bailout packages for Greece and other indebted countries. It also exports to these economies, which are facing severe austerity packages and deep recessions.

    Investors also worry about threats to German banks that hold large amounts of government bonds issued by peripheral countries who are struggling to service their debt.

    All of these factors mean "the risks of spillovers from the sovereign debt crisis to Germany remain high," said Maria Malas-Mroueh, director of Fitch's sovereign ratings group.

    As a percentage of banks' total assets, Fitch said the banking sector's exposure to peripheral Europe is fairly small but concentrated in a number of banks, which could pose risks if the crisis worsened.

    http://www.moneycontrol.com/news/wo...rmany39-aaa-rating-outlook-stable_588492.html