S&P says Franco-German fiscal plan promising
By Walter Brandimarte
NEW YORK (Reuters) - A plan by France and Germany to increase fiscal integration in Europe is "promising" and could help avoid a mass debt downgrade of euro zone countries by Standard & Poor's, a director with the ratings agency said on Tuesday.
Frank Gil, senior director of European sovereign ratings at S&P, said Friday's crucial EU summit could be considered successful if leaders came up with "some indication" they have a strategy to spur economic growth and share fiscal and financial risks.
"There could be, at least what we heard already from the French and the Germans looks potentially promising: a shift toward some sort of fiscal transfer, some sort of fiscal sharing," he said in an interview with Reuters Insider.
John Chambers, chairman of S&P's sovereign ratings committee, also said greater fiscal union in the euro area would "be supportive of ratings."
"It would put finances of the union on a better footing, and would better align the monetary policy with the fiscal policy," Chalmers said in a separate interview with Reuters Insider.
To watch Gil's interview: tinyurl.com/7944gsc
To watch Chambers' interview: tinyurl.com/887wxqv
S&P on Monday issued an unprecedented warning that it could downgrade nearly all euro zone members, including top-rated countries such as Germany and France, if leaders fail to reach an agreement on how to solve the region's debt crisis. Continued...