Moody’s changes EU ratings outlook to ‘negative’
REUTERS: Moody’s on Monday lowered the European Union’s long-term issuer rating outlook from stable to negative, saying the move reflected the negative outlooks of the bloc’s key budget contributors.
“It is reasonable to assume that the EU’s creditworthiness should move in line with the creditworthiness of its strongest key member states,” it said, citing negative outlooks for Britain, France, Germany and the Netherlands.
Moody’s maintained the EU’s tripleA rating, saying its “two key rationales” for assigning the bloc its highest rating remained unchanged: its “conservative budget management” and “the creditworthiness and support provided by its 27 member states.”
Britain, France, Ger many and the Netherlands -- which together account for about 45 percent of the EU’s budget revenue, according to Moody’s -- also maintain a AAA credit rating.
The agency, however, did not exclude the possibility of a future downgrade, saying a “deterioration in the creditworthiness of EU member states” could prompt such a move.
“Additionally, a weakening of the commitment of the member states to the EU and changes to the EU’s fiscal framework that led to less conservative budget management would be credit negative,” it said.
Conversely, the bloc could regain a stable outlook for its ratings should the rating of the key triple-A budget contributors also return to stable, it added.
Moody’s in July lowered the ratings outlook of Germany, Luxembourg and the Netherlands to negative, saying the “level of uncertainty about the outlook for the euro area” was no longer consistent with stable outlooks for the countries.
France and Austria have been under a negative ratings outlook since February, and Britain was assigned the same status in December.
Greece is trying to renegotiate terms of its second bailout, while Spain is under pressure to also request bailout aid in coming after accepting help to recapitalize its broken banking system.
Struggling economies such as Spain, Italy and Portugal are desperate for help to push down their borrowing costs and hope they will receive some good news later in the week.ECB chief Mario Draghi on Monday defended controversial measures to tame the eurozone debt crisis, including buying up government bonds.
Members of the European Parliament said Draghi, widely expected to announce further details on Thursday of how the ECB will ease the pressure on struggling eurozone states, told them that the central bank had a responsibility to intervene when necessary.
Draghi, who made no public comment, said that buying government bonds of up to 3-year maturities on the secondary market did not amount to bailing out spendthrift euro members -- a charge levelled by many German politicians.
REUTERS: US business software maker Oracle has launched an appeal on a five-year long court case that could see SAP pay millions more in damages over copyright infringement.
On Monday, a spokesman for SAP confirmed a report in the German daily Mannheimer Morgen to this effect, adding that “in the worst case the appeal could take two years,” adding SAP was disappointed that Oracle continued to drag out the process.
“We agreed to a reasonable arrangement, since we believe this case has already persisted long enough,” the SAP spokesman said.
SAP agreed in August to pay Oracle $306 million in damages over copyright infringement allegations against a SAP unit, “to save the time and expense of this new trial, and to expedite the resolution of the appeal,” as lawyers for both companies had said at the time.
A Northern California jury determined in 2010 that Oracle should be paid $1.3 billion over accusations SAP subsidiary TomorrowNow wrongfully downloaded millions of Oracle files.
However, U.S. District Judge Phyllis Hamilton last year discarded the jury verdict and said Oracle could accept a $272 million award, or opt for a new trial against SAP.