S&P warns euro nations of possible credit downgrade

LONDON. December 6. KAZINFORM Ratings agency Standard and Poor's has put almost the entire eurozone countries, including Germany and France, on "credit watch" due to fears over the impact of the debt crisis.

S&P's move means six countries with top AAA ratings would have a 50% chance of seeing their ratings downgraded.

The news came as a surprise to investors and saw stocks fall back on early gains as the euro also fell.

France and Germany say a new EU treaty is needed to tackle the crisis, BBC News reports.

The proposal came after talks in Paris between French President Nicolas Sarkozy and German Chancellor Angela Merkel.

They said all 17 eurozone states should should face greater checks on their budgets and sanctions if they run up deficits, and that a new treaty should be completed by March to ensure such a crisis never happened again.

The Paris talks come ahead of an EU summit on Friday that is being seen as crucial for the future of the single currency.

On Monday, S&P's announced that it had placed its "long-term sovereign ratings" on 15 eurozone nations on credit watch "with negative implications".

The ratings agency said the decision was prompted "by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole".

Details also at http://www.bbc.co.uk/