Moody's downgrades Eurozone rescue fund to negative

Moody’s Investors Service has cut the outlook for the credit rating of the European Financial Stability Facility (EFSF) to negative from stable, warning that the rescue fund would lose its Aaa rating.

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The rating agency said the action followed its downgrade move of three European countries’ credit outlook on Monday, reported Xinhua.

Moody’s cut Germany, the Netherlands and Luxembourg’s credit rating outlook from stable to negative, all three countries are guarantors for the EFSF, with Germany accounted for largest share of nearly 30 percent.

The EFSF, which totaled 780 billion euros and had a lending capacity of 440 billion euros, was financed by members of the eurozone. Its main objective is to maintain stability in Europe by providing financial aid to eurozone member countries.

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IANS