WASHINGTON (MNI) – The following is the full statement related to
Standard & Poor’s action Monday on the sovereign rating of the European
Union:

* On Dec. 5, 2011, Standard & Poor’s placed the ratings on 15 of
the 17 member states of the European Monetary and Economic Union (EMU or
eurozone) governments on CreditWatch with negative implications. As a
result, the ratings on 17 European Union (EU) member states are now on
CreditWatch with negative implications.

* We are therefore also placing the ‘AAA’ long-term rating on the
EU on CreditWatch negative. At the same time, we are affirming the
‘A-1+’ short-term rating on the EU.

* The CreditWatch placement on the eurozone member states was
prompted by our concerns about the potential impact on these member
states of what we view as deepening political, financial, and monetary
problems within the eurozone.

* Eurozone members directly contribute approximately 62% of the
EU’s total 2011 budgeted revenues. Our CreditWatch review will focus on
the financial ability of eurozone member states to support the EU’s debt
service should the institution face a period of financial distress.

* We expect to conclude our review as soon as possible after the
European summit on Dec. 9, 2011. Depending on the outcome of our review
of the ratings on eurozone member governments, we could lower the
long-term rating on the EU by one notch, if any.

Standard & Poor’s Ratings Services today placed its ‘AAA’ long-term
issuer credit rating on the European Union (EU) on CreditWatch with
negative implications. At the same time, we affirmed the ‘A-1+’
short-term issuer credit rating on the EU.

The CreditWatch placement is prompted by similar CreditWatch
placements, which we made on 15 eurozone sovereigns on Dec. 5, 2011. The
CreditWatch on the EU is an expression of our concerns about the
potential impact on the future debt service capacity of eurozone
sovereigns, and therefore also the EU, in the context of what we view as
deepening political, financial, and monetary problems within the
eurozone. Eurozone members account for 62% of the EU’s total 2011
budgeted revenues.

For 2011, budgeted revenues from Germany and France were 32% of
total EU revenues, at 16% and 14%, respectively. In total, ‘AAA’ rated
member states account for just over 49% of the EU’s 2011 budgeted
revenues, with only the U.K., Denmark, and Sweden retaining a stable
outlook (together they contribute 13% of the EU’s 2011 budgeted
revenues). Given the EU’s dependency on such revenues from national
budgets, and our recent CreditWatch placements on the ‘AAA’ ratings on
Germany and France, among others, we will concurrently review the ‘AAA’
long-term rating on the EU with the ratings on the eurozone member
states.

CREDITWATCH

We expect to resolve the CreditWatch placements on the eurozone
member states as soon as possible after the European summit on Dec. 8
and 9, 2011. Following this, we then expect to resolve the CreditWatch
on the EU. We typically resolve CreditWatch actions within 90 days,
although we will attempt to resolve the CreditWatch placements on
eurozone sovereigns and therefore the EU sooner, if possible and
appropriate.

We could lower the long-term issuer credit rating on the EU by one
notch if we were to lower the current ‘AAA’ ratings on one or more
member states, with a special focus on the largest contributors, France
and Germany. Conversely, the ratings could be affirmed at their current
levels if we were to affirm the member states’ ‘AAA’ ratings following
the respective sovereign CreditWatch review.

** Market News International Washington Bureau: 202-371-2121 **

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