Frankfurt am Main, February 28, 2014
Moody’s Investors Service, (“Moody’s”) has today changed the outlook on Germany’s Aaa government bond rating to stable from negative. Concurrently, Moody’s has affirmed Germany’s Aaa ratings.
The key drivers for today’s outlook change are:
- Diminished risks that Germany’s government balance sheet will be affected by further collective support to other euro area countries, in particular to Italy (Baa2 stable) or Spain (Baa2 positive), along with reduced contagion risks within the wider euro area.
- Progress with respect to fiscal consolidation as reflected in nearly balanced budgets in 2012 and 2013 and a declining debt-to-GDP ratio.
- Diminished risks that Germany’s government balance sheet will be affected by a further crystallization of contingent liabilities from the German banking system.
Moody’s has affirmed Germany’s Aaa rating due to the country’s advanced and diversified economy, very high debt affordability and a history of stability-oriented macroeconomic policies.
4d) In the view of the Federal Constitutional Court, the OMT Decision might not be objectionable if it could be interpreted or limited in its validity in conformity with primary law in such a way that it would not undermine the conditionality of the assistance programmes of the EFSF and the ESM, and would indeed only be of a supportive nature with regard to the economic policies in the Union. In light of Art. 123 TFEU, this would probably require that the acceptance of a debt cut must be excluded, that government bonds of selected Member States are not purchased up to unlimited amounts, and that interferences with price formation on the market are to be avoided where possible. Statements by the representatives of the European Central Bank in the course of the proceedings and the oral hearing before the Senate suggest that such an interpretation in conformity with primary law would most likely be compatible with the meaning and purpose of the OMT Decision.
here the full pronouncement: bundesgerichtshof
On Jan. 10, 2014, Standard & Poor’s Ratings Services affirmed its unsolicited ‘AAA/A-1+’ long- and short-term foreign and local currency sovereign credit ratings on the Federal Republic of Germany. The outlook is stable.
- In our view, Germany has a highly diversified and competitive economy with a demonstrated ability to absorb large economic and financial shocks.
- We are affirming our unsolicited ‘AAA’ long-term and ‘A-1+’ short-term ratings on Germany.
- The outlook on the long-term rating is stable, reflecting our view that Germany’s public finances and strong external balance sheet will continue to withstand potential financial and economic shocks.