Moody's Investors Service said on Monday it still expects to review its ratings on all European Union sovereign credit in the first quarter of next year, adding that last week's agreement by European policymakers offered few new measures to resolve the region's debt crisis.
Twenty-six of the 27 European Union leaders on Friday agreed to pursue stricter budget rules for the single currency area and also to have eurozone states and others provide up to 200 billion euros in bilateral loans to the International Monetary Fund (IMF) to help tackle the crisis.
"In substance, however, the communiqué offers few new measures, and does not change our view that risks to the cohesion of the euro area continue to rise," Moody's said in its weekly credit report.
"As we announced in November, unless credit market conditions stabilize in the near future, our ratings of all EU sovereigns will need to be revisited. The communiqué does not change that view, and we continue to expect to complete such a repositioning during the first quarter of 2012."
The communiqué reflects the continuing tension between euro area leaders' recognition of the need to increase support for fiscally weaker countries and the significant opposition within stronger countries to doing so, Moody's noted.
"Amid the increasing pressure on euro area authorities to act quickly to restore credit market confidence, the constraints they face are also rising. The longer that remains the case, the greater the risk of adverse economic conditions that would add to the already sizable challenges facing the authorities' coordination and debt reduction efforts."
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