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Europe is facing long road: Merkel

German Chancellor Angela Merkel has said that Standard and Poor's downgrades of nine countries underline the fact that the eurozone faces a "long road" to win back investors' confidence.

Germany kept its AAA rating but S&P stripped France, with which it has co-piloted the eurozone rescue drive, of its top-notch rating - fuelling concerns that that in turn could complicate Europe's efforts to keep its weaker economies afloat.

Ms Merkel said that she had "taken note" of the decision by S&P, which she stressed repeatedly is only one of three major rating agencies.

"The decision confirms my conviction that we in Europe still have a long road ahead of us before the confidence of investors is restored," she said at a televised news conference in the north German city of Kiel, where her conservative party's leadership was meeting.

"But I think it can be seen that we have set off with determination along this road (to) a stable currency, solid finances and sustainable growth," she added.

Ms Merkel stressed the importance of a new treaty enshrining tougher fiscal rules, for which Germany has pushed hard.

Most European Union leaders agreed in early December to draw up the pact, and Ms Merkel has said the pact could be signed as early as the end of this month, and at the beginning of March at the latest.

"We are now called upon ... to implement quickly the fiscal pact and implement it decisively - without trying to water it down everywhere," Merkel said.

The chancellor sought to allay concerns that the downgrade of France, the 17-nation eurozone's second economy after Germany, would complicate the work of the bloc's temporary rescue fund, the £463 billion European Financial Stability Facility.

However, she did underline the urgency of putting its permanent successor, the European Stability Mechanism, in place quickly. European leaders already have decided to get it up and running in July, a year ahead of the original schedule.


From Belfast Telegraph