US rating agency Moody’s yesterday warned that all EU sovereign ratings were threatened by the current financial crisis.
“The continued rapid escalation of the euro area sovereign and banking credit crisis is threatening the credit standing of all European sovereigns,” the agency said in a new special comment.
Moody’s said that “in the absence of policy measures that stabilize market conditions over the short term, or those conditions stabilizing for any other reason, credit risk will continue to rise.”
Greece, Ireland and Portugal all suffered rating downgrades that accelerated unsustainable rises in their borrowing costs over the past two years.
Spain and Italy, which has opened its books to international auditors, have also come under pressure in recent days.
France recently announced deep budget cuts in a bid to retain its top triple-A rating status.
Economists say it is struggling to hold onto the top ranking it shares with the stronger eurozone economies of Germany, the Netherlands, Austria, Finland and Luxembourg.
Moody’s said political uncertainties in Greece and Italy and the worsening of the economic outlook across the euro area had given rise to “the likelihood of even more negative scenarios.
“The probability of multiple defaults ... by euro area countries is no longer negligible,” the agency warned.
“In Moody’s view, the longer the liquidity crisis continues, the more rapidly the probability of defaults will continue to rise,” it said.
The agency also cautioned that a series of defaults would also “significantly increase” the likelihood of one or more members not simply defaulting, but leaving the eurozone.
“Moody’s believes that any multiple-exit scenario — in other words, a fragmentation of the euro — would have negative repercussions for the credit standing of all euro area and EU sovereigns,” the agency added.
Meanwhile, the IMF yesterday denied it was holding talks with Italy about a financial aid package to prop up the European country’s economy.
“There are no discussions with the Italian authorities on a program for IMF financing,” said a one-sentence statement released by an IMF spokesperson, who was not identified.
The denial followed a report by the Italian newspaper La Stampa alleging that the fund could bail out Italy with up to 600 billion euros (US$800 billion) in aid.
According to the report, the money would give Italian Prime Minister Mario Monti a window of 12 to 18 months to implement urgent budget cuts and growth-boosting reforms “by removing the necessity of having to refinance the debt.”
La Stampa said the IMF would guarantee rates of 4 percent or 5 percent on the loan — far better than the borrowing costs on commercial markets, where the rate on two-year and five-year government bonds has gone above 7 percent.
Italy needs to refinance about 400 billion euros in debt next year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day