"In our view, germany has a broad-based and competitive economy that has demonstrated the ability to withstand severe economic and financial shocks," S&P said in justifying its stance. The country had both coped with reunification and the 2009 recession.
The other major U.S. Rating agency, moody’s, on the other hand, had put its assessment of germany’s creditworthiness on the back burner and set the outlook for the federal republic of germany to "negative. In the next few months, the S&P will decide whether to revoke germany’s top credit rating based on further developments – due to the uncertain outlook in the debt crisis.
For portugal confirmed standard& poor’s the "BB" credit rating. The rating is therefore still two levels below the so-called ramshackle level. The outlook remains "negative. However, S&P acknowledged that the country has implemented significant economic reforms over the past twelve months. With regard to cyprus, S&P lowered the creditworthiness by one notch from previously "BB+" to "BB". The bonds are thus also considered highly speculative.
The warnings from moody’s were also directed at german federal states, several banks and state-owned companies, as well as the euro bailout fund EFSF, which so far also has a top rating. EU justice commissioner viviane reding then criticized: "it is interesting that whenever the budgetary situation in the u.S. Deteriorates, certain rating agencies put europe in the spotlight." The market is dominated by the three rough agencies moody’s, standard& poor’s and fitch dominate.
Standard& poor’s, on the other hand, maintains its "stable" outlook for germany. This means that there is currently no risk of a credit rating downgrade here.
A good rating is important on the capital market. As a rule, the better the rating, the lower the interest a borrower has to pay. Germany is regarded as a safe haven in the euro zone and can borrow money on favorable terms. Recently, germany even succeeded in selling government bonds with negative yields to investors. In plain language: the country pays back less than it has borrowed. In contrast to severe market turbulence following earlier downgrades of euro crisis countries, the moody’s warning shot had no effect on german bonds.