The New Normal: Economic Weakness and Decline - by Stephen Lendman
Europe and America are declining while Asia rises.
On Friday, S & P cut credit ratings for nine EU countries, including France, Italy, Spain, Austria, Portugal, Malta, Slovenia, Slovakia and Cyprus. It was old news but not good.
France was downgraded from AAA to AA+.
So was Austria.
Italy fell two levels from A to BBB+.
Spain was lowered two levels from AA- to A.
Portugal fell two levels to BB.
Cyprus was lowered two levels.
Malta, Slovakia and Slovenia were downgraded one level.
On January 16, S&P also cut the European Financial Stability Facility's (EFSF) credit rating given added pressure on nations to fund it, saying:
"We consider that credit enhancements that would offset what we view as the now-reduced creditworthiness of the EFSF's guarantors and securities backing the EFSF's issues are currently not in place."
"We have therefore lowered to AA+ the issuer credit of the EFSF, as well as the issue ratings on its long-term debt securities."
In early December, S & P put 15 EU countries on credit watch. Fourteen remain there suggesting more cuts coming. Especially troubled nations include Portugal, Italy, Ireland, Greece, and Spain. As they go, so go others, including economic powerhouse Germany. Increasingly it looks weak. So does Britain.
The same day, talks between Greece and major creditors collapsed. They want higher returns in return for taking a 50% haircut on worthless junk. It's reflected in one-year Greek bonds. They yield 396% annually if they're around that long.
Hungary's also troubled. Its bonds are rated junk. Western European lenders control 80% of Hungarian banking. They caused the nation's troubles. Prime Minister Viktor Orban wants more financial control, and why not. Western exploitation wrecked the economy.