Berlin rejects Moody's rating warning and insists it is 'anchor of stability'
GERMANY HAS shrugged off the assessment of the Moody’s credit agency that the future of its triple-A rating is in doubt.
Finance minister Wolfgang Schäuble insisted yesterday that, even with a “negative” outlook, Germany remained an “anchor of stability” in the euro zone and “in a very solid economic and financial situation”.
Moody’s made the change to the outlook of the German economy along with that of Luxembourg and the Netherlands. Berlin said the decision by Moody’s was of a short-term nature that did not take into account “a series of initiated measures which should lead to the durable stabilising” of the currency bloc.
Behind the scenes, German officials were not too bothered by Moody’s view that euro zone uncertainty meant Germany’s appropriate rating was “no longer consistent with stable outlooks”.
The warning, which leaves Berlin’s rating and borrowing costs unchanged, chimes nicely with German chancellor Angela Merkel’s warning to her EU partners before she left on holidays that “Germany’s financial means are not limitless”.
Otto Fricke, budgetary spokesman of her junior Free Democrats (FDP) coalition partner, said the agency assessment “should not be overblown” and that Germany “still belongs to the best of the best”.
“In detail, Moody’s says Germany is still a country with a triple-A rating but warns that this could change if Germany continues to give away billions without any chance,” said Mr Fricke.
“We cannot overdo it with help. We are ready to help but there are limits – when others don’t stick to agreements.”
Opposition parties were similarly sanguine about the news.
Social Democrat finance spokesman Carsten Schneider said the announcement reflected “long-term growing doubt among investors about German creditworthiness the more unclear the situation and the larger the euro zone risks”.
However, several economists expressed greater concern for the warning from Moody’s and its implications.
“If we keep taking on rescue packages, we will eventually overwhelm ourselves,” said Prof Kai Carstensen of Munich’s Ifo institute.
Prof Horst Löchel, economist at the Frankfurt School, said the Moody’s report “shows that Germany cannot isolate itself from the euro crisis”.
Euro Group head Jean-Claude Juncker used the news from Moody’s to restate the EU’s “strong avowal to defend the stability of the euro zone as a whole”.
A spokesman for the finance ministry of Finland, the only euro zone country to retain a top rating forecast, said it was “thrilled” by the news.