Moody’s Frowns On Iceland–Sovereign Debt Problems Still Menace

Moody’s and S&P have had a habit of downgrading sovereign paper in nations such as Greece, Spain, and Portugal long after it was clear to the capital markets that their prospects to pay their obligations were distressed. That does not mean that the EU sovereign debt crisis is over. The countries with the most severe problems still have to prove that austerity measures will be accepted by populations that are not meek. There is also a fear that new taxes will drive down GDP in nations that are clawing for more treasury receipts.

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