EU Warned About Credit Problems

Moody's cut the European Union's creditworthiness from "stable" to "negative". In July, Moody's revised the outlook downward for Germany and the Netherlands. Moody's stated that it believed that member countries would likely back their sovereign debt rather than EU debt. The EU recently announced a bond buyback for the sovereign debt of Spain and Italy, two countries that have large deficits and borrowings, leading to very high sovereign debt interest rates.