1 Dec 2012

Rating of ESM fund cut by Moody's

12:08 pm on 1 December 2012

Moody's has cut the AAA rating of the European Stability Mechanism euro rescue fund by one notch and given it a negative outlook.

The agency cited its earlier downgrade of France on 19 November.

AAP reports France is the second-largest contributor to the two funds. Germany is the largest.

Moody's on Friday put the ESM's new rating at Aa1, and also cut the European Financial Stability Facility, the ESM's predecessor, to a "provisional" Aa1 from provisional Aaa, for the same reason.

"The credit risks and ratings of the ESM and the EFSF are closely aligned to those of its strongest supporters," Moody's said.