Shocker, are we really right to give the Greeks a verbal beating? Or is it there government at fault? Hows your government doing? Do you happen to live with a Government full of bible bashing lunatics intent on starting world war three? Or perhaps your Government just agreed to sign a treaty without even asking your consent, perhaps you are lucky and your Government has only gone as far as bankrupting your country and suffering a chronic obsession when it comes to taxation and bankrupting you. Would could go further down the road, is your government shooting at you for protesting in the street lately? Or just maybe the individual reader of these words has a pleasant Government that does not over step its mark, providing the services needed and gets value for its tax payers money, guess what? You aren't responsible for any of it, and neither are the Greeks.
Moody's changes the outlook on France's Aaa rating to negative Moody's Investors Service has today changed the outlook on the Aaa rating of France's local- and foreign-currency government debt to negative from stable. The key drivers of today's outlook change on France are: 1.) The uncertainty over the prospects for institutional reform in the euro area and the weak macroeconomic outlook across the region, which will continue to weigh on already fragile market confidence. 2.) The ongoing deterioration in France's government debt metrics, which are now among the weakest of France's Aaa-rated peers. 3.) The significant risks to the French government's ability to achieve its fiscal consolidation targets, which could be further complicated by a need to support other European sovereigns or its own banking system. Concurrently, Moody's has today also changed to negative the outlook on the Aaa debt ratings of the Société de Financement de l'Economie Française (SFEF) and the Société de Prise de Participation de l'Etat (SPPE) in line with the change of outlook on France's sovereign rating. RATIONALE FOR NEGATIVE OUTLOOK As indicated in the introduction of this press release, a contributing factor underlying Moody's decision to change the outlook on France's Aaa government bond rating to negative is the uncertainty over the euro area's prospects for institutional reform of its fiscal and economic framework and over the resources that will be made available to deal with the crisis. Moreover, Europe's weak macroeconomic prospects complicate the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness. Moody's believes that these factors will continue to weigh on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions. In addition to constraining the creditworthiness of all European sovereigns, the fragile financial environment increases France's susceptibility to financial and macroeconomic shocks given the concerns identified below. The second driver underpinning the negative outlook is the ongoing deterioration in France's government debt metrics, which are now among the weakest of France's Aaa peers. France's primary balance is in deficit and compares unfavourably with other Aaa-rated countries with a stable outlook. The upward trajectory of France's outstanding debt over the decade preceding the crisis, at a time when most other governments were reducing their debt ratios, places it amongst the most heavily indebted of its Aaa-rated peers, alongside the United States and the United Kingdom whose Aaa ratings also carry a negative outlook. France's capacity to support higher government debt levels is also complicated by the limitations of operating without the advantage of being the single "risk-free" issuer of debt denominated in its currency. The third driver of today's announced action is the significant risk attached to the government's medium-term ability to implement consolidation targets and achieve a stabilisation and reversal in its public debt trajectory. While the rating agency acknowledges the French government's efforts to implement important economic and fiscal reforms since 2008, and meet fiscal targets over the past two years, the agency notes that France's prior reluctance to decisively reform and consolidate have left its finances in a challenging position amid an ongoing global financial and euro area debt crisis. Stabilising, and ultimately reducing, France's stock of outstanding debt will be contingent on the French government maintaining its fiscal consolidation effort. Meanwhile, the fragile financial market environment, which will endure for many months to come, constrains the French government's room to manoeuvre in terms of stretching its balance sheet in the face of further direct challenges to its finances -- for example, from the possible need to provide support to other European sovereigns or to its own banking system, both of which would further complicate its own fiscal consolidation process. RATIONALE FOR UNCHANGED Aaa RATING France's Aaa rating is supported by the economy's large size, high productivity and broad diversification, together with high private sector savings and relatively moderate household and corporate liabilities. This provides considerable capacity to absorb shocks, as demonstrated by the resilience of domestic demand during the 2008-2009 global crisis. The ability of the French government to finance its very high debt level at affordable interest rates in an uncertain financial and economic environment will be crucial to it retaining its Aaa rating. WHAT COULD MOVE THE RATING DOWN Moody's would downgrade France's government debt rating in the event of an unsuccessful implementation of economic and fiscal policy measures, leading to failure of the government's attempt to stabilise and reverse the high public debt ratio, generating a further weakening of the debt metrics against peers and further reducing France's resiliency to potential economic and financial shocks. A material increase in exposure to contingent liabilities from the national banking system or a requirement for further support to neighbouring euro area member states if the euro area crisis were to intensify could also prompt a rating downgrade. A return to a stable outlook on France's sovereign rating would require significant progress towards improving the debt metrics and an easing of the euro area sovereign crisis given Moody's concerns regarding the country's exposure to contingent liabilities.
To promote entrepreneurs, US/EU should regulate the market capitalization/monopoly/hegemony of all listed companies to twice their quarterly revenue. Central Banks have been regulating the Reserve requirements & Interest rates to promote sustainable economic growth.