14 Feb 2012

Moody's downgrades outlook for Britain and France

1:59 pm on 14 February 2012

International rating agency Moody's has downgraded to negative its credit outlooks on the AAA ratings of France, Britain and Austria.

It has also cut the ratings of Italy, Portugal, Spain, Slovakia, Slovenia and Malta.

The agency says the changes reflect those countries' susceptibility to the growing financial and macro-economic risks emanating from the eurozone crisis, Reuters reports.

British Chancellor of the Exchequer George Osborne says this is proof that Britain can not waiver from dealing with its debts and must keep its promise to slash its large budget deficit.

The government in Britain has come under increasing pressure to soften its austerity measures to give a stalling economy room to breathe.

Germany's top-tier rating was described as "appropriate" by Moody's and triple-A status was also unchanged for Denmark, Finland, Luxembourg and the Netherlands.

At the same time, it affirmed its triple-A rating on the euro zone's bailout fund, the European Financial Stability Fund.

Moody's announcement came a day after Greece's parliament approved a deep new round of budget cuts in the hope of securing new bailout funds of and avoiding a chaotic default in March.