PARIS (AFP) - Europe faces a long road ahead to restore investor confidence, German Chancellor Angela Merkel said on Saturday, after a stinging series of S&P ratings downgrades sparked a determined response.
On Friday, Standard and Poor's spared Germany's top AAA rating, citing its strong economy and finances but in a blow to France's economic standing, cut its rating by one notch to AA+.
S&P also downgraded Italy and Spain, two countries seen as particularly vulnerable in the euro zone debt crisis, by two notches as it affirmed seven and downgraded nine euro zone states in all.
The action was merited because 'the policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,' it said. In other words, Europe cannot be trusted to put its house in order.