S&P downgrades the Eurozone bailout fund

The beleaguered nations of Europe created a program called EFSF (European Financial Stability Facility) to help sovereign debt issuers and Euro Zone banks cope with the ratings agency cuts to their debt ratings and rising interest rates. But yesterday, the S&P downgraded the EFSF itself.

Petros Giannakouris/AP
The European Union flag flutters in the wind at the Acropolis Hill, in Athens in this file photo. Europe created a program called EFSF (European Financial Stability Facility) to help sovereign debt issuers and Euro Zone banks cope with the ratings agency cuts, but yesterday S&P downgraded the fund itself.

In case you stopped keeping score:

The beleaguered nations of Europe created a program called EFSF (European Financial Stability Facility) to help sovereign debt issuers and Euro Zone banks cope with the ratings agency cuts to their debt ratings and rising interest rates they'd be forced to pay on their bond issuance.

And yesterday Standard & Poors downgraded the EFSF itself.

From the Financial Times:

Standard & Poor’s on Monday stripped the eurozone’s bail-out fund of its AAA credit rating, potentially constraining its ability to contain the region’s debt crisis and focusing attention on efforts to create a more robust successor.

S&P lowered the European Financial Stability Facility’s rating to AA+, following its decision on Friday to remove the triple-A ratings of France and Austria, two of the find’s guarantors.

The EFSF relies on the triple-A ratings of its guarantors to raise cash in debt markets, which it then lends to stricken eurozone governments at a small mark-up. France and Austria account for some €180bn of the credit guarantees underlining the fund, created after the first Greek bailout in May 2010 and supposed to serve as a firewall sealing the eurozone’s core economies from the crisis.

But here's the punchline - European stocks are up this morning overseas as are US stock futures (as of 3:30 am), proving my theory that our markets are no longer capable of surprise at most Euro-related headlines.  We got better than expected data from China and that's really all the market cares about now.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.