S&P Downgrades Ireland As EU Nears Debt Agreement

Standard & Poor’s announced that it has lowered the rating for Ireland and gave a negative outlook for the country as government debt and the banking sector weigh on public finances, according to The Wall Street Journal. On Wednesday, the rating agency made public its decision to lower its rating for Ireland to A-minus from A, and left the negative outlook until a further review is conducted in April. The announcement cited the massive debt financing needs of bailed-out Irish banks for the downgrade, although even with the drop, the S&P rating is still a notch above ratings from rival agencies Moody’s Investors Service and Fitch Ratings.

Meanwhile, European Union leaders appear to be nearing an agreement over a comprehensive, coordinated package for dealing with the region’s sovereign debt crisis and bailout fund, according to Reuters. German Cancellor Angela Merkel and French President Nicolas Sarkozy are prepared to present a joint proposal on stronger policy coordination that could include a revision to the size and scope of the €440 billion European Financial Stability Facility. The potential deal between Germany and France would represent a major step forward in reaching a consensus on how to solve the crisis, with the countries clashing in previous talks over the form a various proposed solutions.

Click here to read the story on the Irish downgrade from The Wall Street Journal.

Click here for coverage of the latest EU debt discussions from Reuters.