Standard & Poor's has announced that if the European economy plunges back into a recession, France could lose its triple-A rating and be downgraded to AA+. However, analysts believe this situation is unlikely to occur.
The simulation shows that in the event of a worsening of the situation, Germany would be able to maintain the maximum rating while the countries most exposed on the debt front such as Italy, Spain and Portugal could see their rating lowered by two notches. Ireland would be downgraded one notch. S&P also predicted what the consequences would be for 47 banks. Twenty of these would see their tier 1 fall below 6% and between 80 and 90 billion would be needed for recapitalisations. The overall cost to the Eurozone could be 115 to 130 billion.
