Moody’s has revised the credit outlook of Germany to negative, raising the possibility of the economic major losing its coveted ‘Aaa’ rating amid worsening European debt turmoil.
Germany becomes the latest European economic power house this year after France to see its credit outlook being downgraded by the global credit rating agency.
The credit rating outlook of Germany, Luxembourg and the Netherlands had been lowered to negative, Moody’s Investors Service said on Monday.
European debt crisis
The agency noted that rising uncertainty over European debt crisis and increased likelihood of Greece’s exit from the euro currency, had raised the risks to these three economies.
‘Aaa’ indicates the safest credit rating.
In a statement, Moody’s said the decision to change the outlooks to negative was driven by the view that the level of uncertainty about outlook for the euro area, and the potential impact of plausible scenarios on member states were no longer consistent with stable outlooks.
Moody’s has also weighed in the need for “greater collective support” for other euro area nations such as Spain and Italy.