DEBT

Standard & Poor’s Gets Political

Warns euro zone of downgrade just before summit.

Standard & Poor’s latest warning of a downgrade to the entire euro zone is a sign that the credit rating agency is forging its way into politics leading up to a summit between European leaders over the debt dilemma. On Tuesday, S&P warned 15 euro zone nations—including France and Germany—of a potential downgrade, citing the region’s policy makers’ inability to solve its financial problems. The agency made a similarly politically charged move earlier this year when it downgraded the U.S., blaming political discussion on reducing American deficit for deflating the country’s economy. While some, like market strategist Anthony Valeri, think “S&P should back off,” the agency insists, “The crisis in the euro zone has now reached a level that’s systemic. Stresses have become more tangible and a bigger threat near term. It has become a crisis of euro governance.”