Germany keeps AAA rating with S&P agency
Ratings agency Standard & Poor's has confirmed its top-notch AAA ranking for Germany. Unlike Moody's ratings agency, S&P trusts in the country's ability to foot the eurozone rescue bill.
Due to Germany's "strong economic fundamentals," S&P not only renewed its triple-A rating, but maintained a stable outlook for the country's long-term sovereign debt as well, the international ratings agency said in a statement Thursday.
"Germany has a highly diversified and competitive economy with a demonstrated ability to absorb large economic and financial shocks," S&P said in the statement.
Germany's public finances and strong external balance sheet would be able to withstand such shocks, the statement went on, which was why the outlook for Germany's creditworthiness would remain stable.
S&P pointed specifically to Germany's ability to overcome financial stresses in the wake of the country's reunification in 1991, as well as the economic recession of 2009.
Moody's German worries
The move came after the shock decision by ratings agency Moody's last week, which cut the credit outlook for Germany from "stable" to "negative."
Moody's said its decision was based on rising uncertainty regarding the outcome of the eurozone debt crisis and a Greek exit from the 17-nation currency area.
"There is an increasing likelihood that greater collective support for other euro area sovereigns, most notably Spain and Italy, will be required," Moody's warned, suggesting that this might drag down Germany, too.
According to a recent estimate by the German Institute for Economic Research (DIW), a Greek exit from the eurozone alone would cost Germany up to 89 billion euros ($109 billion) in lost credits and loan guarantees provided for the debt-wracked country.