Perhaps the most covered story internationally this year has been about the debt struggles throughout the European Union and its impact on the rest of the world. But, for this week anyway, there was a much different and positive tone to coverage about the European sovereigns, especially in Greece and Germany.
Perhaps the most shocking of all came as one of the oft-maligned U.S.-based credit ratings agencies raised the credit profile of one of the euro zone’s most troubled nations. Standard & Poor’s raised Greece’s sovereign credit rating by six steps to a “B-minus” and also placed it in a “stable” outlook category. It’s a massive change for a nation that had been miles below an “investment grade” rating and one that has struggled with a negative outlook by the agency for years. In fact, the rating is the highest Greece has been given since early 2011.
S&P justified the improved rating by noting a deeper commitment and greater transparency therein on the part of EU member nations carried by a Germany that had dragged its feet for some time with calls for increased austerity and related concessions to avert risk. Meanwhile, economic news in Germany turned positive after some recent months of pessimistic attitudes that surprised the fiscal and production powerhouse.
Germany’s business confidence, which sunk to its lowest level since early 2010 in October, increased for the second time in as many months in December, and did so by more than was forecast. Germany also experienced a noticeable bump in exports and new factory orders, as domestic companies involved in trade have found more opportunities for partnerships outside of an EU it had relied upon so heavily at one time.
-Brian Shappell, CBA, NACM staff writer