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S&P downgrades France’s rating; Greek swap talks on hold; Euro hits new low

Friday, January 13th 2012 - 21:18 UTC
Full article 17 comments

Stock markets and the Euro traded lower Friday as Greek debt swap talks were put on hold and France’s Finance minister confirmed that Standard & Poor’s has downgraded the country’s credit rating. Read full article


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  • Beef

    When Europe is at crisis they turn to us Brits to save them. Looks like we are returning to the table with a much stronger hand, maybe even a Royal Flush!

    Jan 13th, 2012 - 09:59 pm - Link - Report abuse 0
  • briton

    i wont laugh [he he] stop it briton,
    but they created it, its their problem, and good luck,
    but we must come out, or those corupt sods will try every trick in the book,to get our money.

    Jan 13th, 2012 - 10:10 pm - Link - Report abuse 0
  • Forgetit87

    And Britain is in condition to save whom, being stagnated and running even more deficits than the downgraded France? I agree with the German government's take:

    “Michael Fuchs, deputy leader of the Christian Democrats, said: 'This step is out of order. Standard and Poor's must stop playing politics. Why doesn't it act on the highly indebted United States or highly indebted Britain?'

    ”He added: “If the agency downgrades France, it should also downgrade Britain in order to be consistent.”

    The UK's only advantage over the likes of France, when it comes to producing growth, is having its own Central Bank. And given the poor numbers the UK economy has produced as of late, we can see that this advantage is not put into use very well. The UK's access to financial markets has failed to deliver.

    Jan 13th, 2012 - 10:46 pm - Link - Report abuse 0
  • Teaboy2

    @3 And why should they downgrade Britain just because france was downgraded. We are not in the Euro, the pound is stable and our debt reductions measures are much stronger. In otherwords britian is in a much stronger and more capable position to repay it debts then even germany. If the euro fails the eurozone countries will all be downgraded no ifs or buts about it. But britain won't be as we are not in the bloody euro. Its the euro that is the problem for france and all the other countries, its the euro that caused todays downgrade of frances credit rating.

    All germany is doing by saying what they said, is being spitefully jealous of us brits. France said the exact same thing back in december only to be put in its place. No doubt we will put germany it its place too, as clearly they are trying to avoid their credit rating being downgraded by trying to deflect attention to britain just like france tried to deflect the attention to britain in december but failed.

    Jan 13th, 2012 - 11:48 pm - Link - Report abuse 0
  • Forgetit87

    What debt reduction measures? The UK runs huge fiscal deficits - much larger than Italy's, to say nothing of France's, even if we take into account GDP size. The German official complained about the lack of change in the UK's credit rating b/c Britain grows less, and has larger deficits, than France. Thus her ability to pay off her debts is compromised and is perhaps inferior to France's - you not being a Eurozone nation notwithstanding. By the way, we saw the same happened to the US, even though the dollar is nowhere as threatened as the Euro. And the US problem is very similar to the UK's: debt grows more than the economy. And please, Germany has no reason to be jealous of you.

    Jan 14th, 2012 - 12:23 am - Link - Report abuse 0
  • Lord Ton

    ForgeTit - we've been running a huge deficit since the 14th century !

    Still here :-)

    Jan 14th, 2012 - 02:04 am - Link - Report abuse 0
  • Forgetit87

    Though I'm not familiar with UK economic history, I doubt that is true, RH. In any event, fiscal deficit is much more of a problem now than before the financial crisis. See how the 2009 figure stands out from previous years'.

    Jan 14th, 2012 - 02:22 am - Link - Report abuse 0
  • Teaboy2

    @forget. - “What debt reduction measures?”

    Err cuts in government public spending, cuts to NHS, cuts to Education, cuts to Welfare, cuts to military spending and cuts in public sector jobs. Rise of 2.5% of value added tax, increased taxes, government scheme to support people in starting a buisness, such as the enterprise allowance scheme - Increase in new businesses means increase in growth.

    The list goes on and on Forget, though am sure as you claim to know about economics and so much about the UK's debt issues you would have been well aware of that. But then clearly you were not aware, and as such it makes you views on the UK situation somewhat uneducated.

    Oh and anyone with a clue about economics can tell you the cash surplus/deficit data (e.g countries cash flow on trade) is based purely on products exported and imported. It does not give you a total view of the countries income and expenditure, as it does not include the income from the financial sector, that makes up 10% of the countries economy now does it include income from national taxes either. I think you will therefore find that the countries bank account is clear in the black and not in the red, as many of you argentines would like to believe.

    By the way a trade deficit does not effect government revenues as much as you think, as most trade is between one company and another company abroad, not between governments. Oh and by the way your chart you linked to over covers upto 2009 so its 2 years out of date anyway.

    In fact the annual cost to britian for servicing its national debt is only 3% of our GDP, about the same amount of money we spend on our defense budget each year. As of July 2011 the national debt amounted to 64% GDP, which compared to the national debt of the 1950's, which was around the 200% GDP, so todays national debt issue is nothing but a ripple in the pond. I appriecate you argentines are all worried about us, but seriously why worry, after all we are not worried.

    Jan 14th, 2012 - 03:37 am - Link - Report abuse 0
  • Forgetit87

    I'm aware of the the cuts that have been going under Cameron/Osborne. But what I said before stands still, Teaboy: with all the attempt at fiscal orthodoxy, the UK still produces larger deficits than most Eurozone countries, France included. And those cuts will dent demand (most likely they already have). Your argument doesn't say anything positive about the UK's ability to pay off debt -- it questions it.

    And the link I posted before has nothing to do with the trade balance; read it again, it is a measure of public revenue minus spending as a function of GDP - that is, it measures whether countries are running budget surpluses or deficits (if you check China, a trade surplus country, you'll see that for the last few years she too has run deficits at that measure). It's widely known that Britain's fiscal deficits have approached 10% of GDP since the financial crisis, as the graph shows.

    Jan 14th, 2012 - 03:55 am - Link - Report abuse 0
  • Teaboy2

    My dear boy, saying cash surplus/deficit you linked to is nothing to do with trade deficit, you clear do not understand it or much about economics then as cash surplus/deficit is still cash flow, minus revenue from financial assets. Its basically nothing but government expenses and aqusitions, its therefore nothing more than government trading - Just like a business trades, only difference is governments gain income from taxes as well to make up for any deficit in their cash surplus/deficit. Plus as i said the chart you refer it is out of date, it is from 2009 its been 2 years since then. And as for it approaching 10%GDP, well it the financial sector makes upto 10% of our annual GDP, and then you have taxes people have paid to the government too so any deficit is effectivly wiped out when you take the money from the financial sector and taxes into account.

    Also i made it clear britian is capable at servicing its debts as the cost of doing so is only 3% GDP. You will see that even in britains boom years the cash surplus/deficit was in deficit. Yet we were still making money overall and the economy was booming. So sorry but relying on the cash surplus/deficit charts to give a picture of whether britian can cope is naive to be honest. Oh and it also fails to take in to account money made from bonds and gilts too.

    Jan 14th, 2012 - 10:10 am - Link - Report abuse 0
  • briton

    the difference is,
    in their case, its their own fault
    in our case, its their fdault .

    Jan 14th, 2012 - 01:21 pm - Link - Report abuse 0
  • zethe

    The UK has seen worse debts and got through it. Much worse ones.

    Jan 14th, 2012 - 07:58 pm - Link - Report abuse 0
  • briton

    1939-46 as an example,

    Jan 15th, 2012 - 07:56 pm - Link - Report abuse 0
  • Forgetit87

    Teaboy, aren't you that guy who once said the UK had a per capita income of 1 million dollars? and then, after being made to see the stupidity that you had said, tried to imply that you were talking about a whole new but entirely obscure measure? Have a look at China's cash balance on the same website. China's widely known to be a trade surplus country, but on that measure she's had deficits for the better part of the last decade; that's because that measure has nothing to do with trade, but with the budget. Government trade? what in hell are you on about? That link explains very well what it's measuring, the balance of government expense versus earnings (mainly tax revenue); in other words, the budget balance. Where in hell did you take that the financial sector has anything to do with this? Who told you it has anything to do with how the public deficit is calculated?? If that - revenues minus financial sector (lol!) - was how budget balance was measured, then the UK'd have a budget surplus of 25% of GDP, which is ludicrous on its face. Your post gotta be the stupidest thing I have ever read on economics. But OK, since you don't wanna believe me, since you'd rather pretend the UK runs no deficits, that everything is fine with her, even if to imply this you have to invent stuff, you should perhaps argue with the British financial press. See the headlines it's released for the last few years:

    The Telegraph
    “UK has third biggest budget deficit in Europe”
    ”Britain’s shortfall in its finances amounted to 10.4pc of gross domestic product (GDP) in 2010“

    The Guardian
    ”UK budget deficit 'to surpass Greece's as worst in EU'“
    ”European commission's spring forecasts put UK budget deficit this year at 12% of GDP – the highest in the European Union and worse than Treasury estimates“

    Financial Times
    ”Why cutting fiscal deficits is an assault on profits“
    ”In the second quarter of 2011, the [UK] government ran a financial deficit of 9.3 per cent of gross domestic product.”

    Jan 15th, 2012 - 09:46 pm - Link - Report abuse 0
  • Fido Dido

    “1939-46 as an example”

    both you imbeciles, the debt was high for in that time, totally different time because there was no welfare system like how it's today in the UK.
    reality is and I showed the charts of Merril Lynch and JP Morgan chase banks many times here that UK's debt to GDP in reality is 1000% and Teaclown even commented that it's not possible to have a GDP above 100%. All what the UK's economy has is the london banking (broke) system and that's why they fight the TOBIN TAX what is a nail of the coffin of the UK's economy. Who's behind it? The Germans.

    Jan 15th, 2012 - 11:06 pm - Link - Report abuse 0
  • zethe

    It's nice how much you two care.


    Jan 16th, 2012 - 12:43 am - Link - Report abuse 0
  • briton

    totally different time ,
    mmmm , thats what the romans said,
    but as you know different, then the point is lost, is it not .

    Jan 16th, 2012 - 01:53 am - Link - Report abuse 0

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