Ratings agency Moody’s on Monday warned that it might cut the “AAA” ratings of France, the UK and Austria, as it downgraded six other European nations — including Italy, Spain and Portugal — citing growing risks from Europe’s debt crisis.
Moving less aggressively than rival agency Standard & Poor’s last month, but putting the UK rating in jeopardy for the first time, Moody’s said it was worried about Europe’s ability to undertake the kind of reforms needed to address the crisis and the amount of funds available to fight it.
It also said the region’s weak economy could undermine austerity drives by governments to fix their finances.
Photo: AFP
The US ratings agency said it changed the outlooks for the -ratings of France, the UK and Austria to negative because of “a number of specific credit pressures that would exacerbate the susceptibility of these sovereigns’ balance sheets.”
Germany’s top-tier rating was described as “appropriate” by Moody’s and it affirmed the “AAA” rating on the eurozone’s bailout fund — the European Financial Stability Fund.
Moody’s, which said late last year it was reconsidering its European ratings, cut by one notch the ratings of Italy, Portugal, Slovakia, Slovenia and Malta and downgraded Spain by two notches.
Moody’s said the scope of the downgrades was limited because of “the European authorities’ commitment to preserving the monetary union and implementing whatever reforms are needed to restore -market confidence.”
The announcement came a day after the Greek parliament approved a deep new round of budget cuts in the hope of securing new bailout funds and avoiding a chaotic default next month.
The rating outlooks of the nine countries affected by Moody’s action was set to negative, “given the continuing uncertainty over financing conditions over the next few quarters and its corresponding impact on creditworthiness,” Moody’s said.
British Chancellor of the Exchequer George Osborne responded by saying the country must keep its promise to slash its large budget deficit.
“This is proof that, in the current global situation, Britain cannot waver from dealing with its debts,” Osborne said. “This is a -reality check for anyone who thinks Britain can duck confronting its debts.”
The UK government has come under increasing pressure to soften its austerity measures to give a stalling economy room to breathe.
The French government said it would press ahead with its policies to improve competitiveness and growth while reducing the government deficit.
“The government is determined to press ahead with its actions to boost growth and competitiveness, notably the reform of the financing of welfare, of employment and the reduction of public deficits,” French Finance Minister Francois Baroin said in a statement.
Moody’s move follows one by Standard & Poor’s last month, when France and Austria lost their “AAA” status, while Italy, Spain, Portugal, Cyprus, Malta, Slovakia and Slovenia were downgraded. S&P also cut the European bailout fund by one notch.
Last month, ratings agency Fitch also downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain, indicating there was a one-in-two chance of further cuts in the next two years.
Meanwhile, S&P on Monday lowered the credit rating of 15 Spanish banks, while Fitch lowered the credit rating of Spain’s four largest banks.
Spain’s biggest financial institutions were hit — including Santander, BBVA, Bankia and CaixaBank — the ratings agencies said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
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],”