PARIS (MNI)- The European Central Bank is working on “all possible
scenarios” to address the possible effects on the European Financial
Stability Facility should France loose its AAA credit rating, ECB
President Mario Draghi said on Monday.
Speaking to members of the European Parliament in Brussels, Draghi
said that “there are several things that can be done. We are working
actively on all possible scenarios.” He did not provide details.
Draghi said that a negative effect on the EFSF from a French
downgrade would be eased by the decision by EU leaders to launch the
permanent bailout fund, the European Stability Mechanism, in mid-2012
rather than a year later as originally planned.
Draghi said he hoped the “recapitalization of the ESM could also be
accelerated.”
On the subject of credit ratings, Draghi said they should one of
several inputs investors use to judge credit-worthiness, not the only
input. “We shouldn’t make too much of these ratings changes by these
rating agencies,” Draghi said.
But he added that if France were to loose its AAA rating, other
countries would also likely to have rating changes as well.
–Paris newsroom, +33142715540; jduffy@marketnews.com
[TOPICS: M$$EC$,M$X$$$,MGX$$$,MT$$$$]
