Moody's warns of French downgrade if Greece leaves eurozone
Rating agency Moody’s has warned that a Greek pullout from the eurozone could lead to downgrades of some of the region’s top-rated governments including France and Germany.
"Should Greece leave the euro, posing a threat to the euro's continued existence, Moody's would review all euro area sovereign ratings, including those of the Aaa nations," it said.
The triple-A eurozone countries under Moody's ratings are Austria, France, Germany, Finland, Luxembourg, and Netherlands.
The agency also said that an EU rescue of Spain's banking sector could force a cut to Spain's sovereign rating due to the "increased risk to the country's creditors."
The warning comes head of an emergency conference by eurozone finance ministers on Saturday to discuss an expected request for aid from Spain, the fourth and biggest country to cry for help in Europe's two-year debt crisis.
Spain continues to deny that is will seek aid, but an EU official said that while the country might not have made an official request the conference call would take place.
As senior officials from the euro area prepared the details of a Spanish bank bailout, new IMF stress tests showed that banks in Europe's fourth biggest economy need about 40 billion euros in new capital.
The IMF tests showed that while Spain's top two banks, BBVA and Banco Santander, were solid, the rest of the banking sector was struggling.
The tests were originally to be released on Monday, but the timetable was moved up as European diplomats said Spain would likely move Saturday to begin crafting a deal for an EU rescue of its banks.
Media reports earlier said Spain could ask for a bank rescue, estimated by Fitch Ratings at up to 100 billion euros.