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'Moody's credit rating downgrade reflects EU divisions'

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Published on Sep 4, 2012

Moody's Investors Service has downgraded the European Union's long-term issuer rating outlook from 'stable' to 'negative.'

The rating company issued a statement on Monday, saying the downgrade reflected negative outlooks assigned to the bloc's key budget contributors -- Britain, France, Germany, and the Netherland.

Credit rating outlooks of Britain, France, Germany, and the Netherlands, which together account for around 45 percent of the EU's budget revenue, are negative, though they have kept their triple-A credit rating.

The agency also warned of the possibility of a future EU downgrade, noting that "deterioration in the creditworthiness of EU member states" could trigger such a move.

In July, the rating agency changed the outlook for the ratings of Germany, Luxembourg, and the Netherlands to negative from stable, citing the uncertainty about the eurozone's ongoing debt crisis.

Press TV has conducted an interview with James Walston, professor at the American University of Rome, to further discuss the issue.

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