Rating agency Moody’s has changed the European Union’s financial outlook from 'stable' to 'negative', warning that the bloc's AAA rating could also be downgraded.
The change reflected the status of its largest members, Moody’s said in a statement.
They are all exposed to the debt crisis it added, insisting that “the large AAA-rated member states would likely not prioritise their commitment to backstop the EU debt obligations over servicing their own debt obligations.”
Germany, the Netherlands and Luxemborg had their outlook changed to “negative” in July, while France and the UK were degraded earlier this year. These countries account for around 45% of the EU's budget revenue together.
Moody’s said it would have to review the EU’s AAA rating if any of its larger members had their status downgraded. However it said it would also consider changing the status back to stable if the member states regained economic health.
“It is reasonable to assume that the EU's creditworthiness should move in line with the creditworthiness of its strongest key member states," the agency added.