• Home
• /
• Markets

Spanish and Greek crisis may trigger downgrades

All sovereign ratings in the region, including the Aaa of nations such as Germany, would need to be reviewed if Greece left the 17-nation currency union, New York-based Moody’s said in a statement on Friday. The credit standing of Cyprus, Portugal, Ireland, Italy and Spain would deteriorate as the risk of a Greece exit rose, the company said.

Moody’s said that a Greek exit from the euro could pose a threat to the currency’s existence.

“Were Greece to leave the euro, posing a threat to the euro’s continued existence,” the rating agency said.

Should an agreement between whatever Greek government is formed and its international creditors be reached, Moody’s said euro area ratings would generally hold at current levels for the time being.

Greece is rated just above default by Moody’s at C, while Standard & Poor’s gives it a CCC rating, similar to Fitch Ratings.

Spain’s banking crisis is mostly specific to that country and wouldn’t need to be a source of contagion to others in the region except for Italy, which also has a rising funding reliance on the European Central Bank through its banks, Moody’s said in the statement.