Solution beyond reach, says rating agency

  • @AlistairDawber

Fitch, the credit rating agency, dealt a huge blow last night to the efforts of Europe's leaders to rescue the beleaguered bloc by declaring that, in its view, "a 'comprehensive solution' to the eurozone crisis is technically and politically beyond reach".

Announcing that it was considering downgrading the debt rating of six eurozone countries – Italy, Spain, Ireland, Belgium, Slovenia and Cyprus – Fitch said that last weekend's summit of European leaders, which was overtaken by rows over Britain's refusal to sign up to a new treaty on tighter fiscal union, had failed to provide any solution to the worsening crisis.

Fitch also moved directly against France, saying that while it was affirming Paris's top triple-A rating, it had adopted a negative outlook on French debt.

In today's febrile markets, the merest hint of a downgrade has been enough to ratchet up bond yields, adding to the cost of already expensive sovereign debt.