Europe’s Woes Weigh on World
Europe long ago lost its ability to drive global economic growth, but it is threatening to put on the brakes.
The euro zone’s long-running debt crisis continues to weigh on the region’s credit rating, and those of the bloc’s major trading partners. ¬Western Europe’s rating falls by 1.8 points in ¬Institutional Investor’s latest Country Credit survey, and the average global rating declines by a similar amount from the level that prevailed in September.
“Overall, sovereign balance sheets are still in pretty bad disrepair,” says Carl Ross, a managing director for investments at Oppenheimer & Co. in Atlanta, “and while there has been a lot of talk, there has not been a lot of progress.”
How We Compiled the RatingsInstitutional Investor’s Country Credit ratings are based on information provided by senior economists and sovereign-risk analysts at leading global banks and money management and securities firms. The respondents have graded each country on a scale of zero to 100, with 100 representing the least likelihood of default. We weighted participants’ responses according to their institutions’ global exposure. Names of respondents are kept strictly confidential.
The March 2012 Country Credit survey was conducted by Researcher Valentina McKenzie and other II staff under the guidance of Senior Editor Jane B. Kenney.