Lese majesty. What not even the world's three major rating agencies – Standard & Poor's, Moody's and Fitch – had dared to do, little Egan-Jones did: downgrade the debt of stainless Germany.
The US rating agency lowered Berlin's score by a notch, and moreover with a negative outlook, due to "the financial burden that will weigh on the country" involved in the eurozone rescue plan. And therefore, while S&P's recently downgraded half of Europe's rating, saving Germany's triple A, the Egan-Jones took it to AA-.
“Germany remains the strongest economy in the European Union – explains the agency in a note – but it is nevertheless too exposed with the bailout fund and, through the ECB, also towards the banks and sovereign debts of the weaker countries”. Furthermore, there are some objectively negative data: public debt is expected to rise in 2011, to 86% (from 83% the previous year), and the deficit-GDP ratio to 4,6%.
However, Egan-Jones underlines the extremely positive aspects of Berlin's economy: unemployment at only 6,8%, even if destined to increase, inflation at 2% in 2010, and a positive trade balance. “But above all – continues the agency – the +4% growth recorded in the last quarter of 2011 is striking compared to moribund Europe".
Solid Germany, but ready to be dragged too into the abyss of crisis. Egan-Jones' judgment challenges that of Moritz Kramer, European head of Standard & Poor's: “Berlin will retain its triple A rating even in the event of a recession in 2012”.
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