Ratings agency Moody's has lowered the European Union's credit rating outlook. The agency claimed that the change reflected a drop in the creditworthiness of individual nations in the bloc.
The New York-based agency said it was lowering the outlook for the EU from “stable“ to “negative“ on Monday.
"It is reasonable to assume that the EU's creditworthiness should move in line with the creditworthiness of its strongest key member states," Moody's said, citing negative outlooks for Britain, France, Germany and the Netherlands.
Those four countries - which account for about 45 percent of the EU's budget revenue - did keep their triple-A credit rating. Moody's said it was reassured, for the time being, by "conservative budget management" and "the creditworthiness and support provided by its 27 member states."
The bloc could regain its stable outlook for its ratings should the outlook of the key triple-A budget contributors also return to stable, it added.
However, it said that any "deterioration in the creditworthiness of EU member states" could prompt a future downgrade, the agency said.
The ratings outlook of Germany, Luxembourg and the Netherlands was lowered to negative by Moody's in July. France and Austria have been under a negative outlook since February, while Britain was assigned that status in December.
Plan to lower borrowing costs
European Central Bank President Mario Draghi used a closed-door meeting with EU lawmakers on Monday to defend plans to restart a program to buy sovereign debt in order to lower borrowing costs for some eurozone countries.
Downgrades in agency ratings of a country or any other entity - rather than the outlooks which are used to predict the possibility of one - tend to increase the level of interest levied on borrowing by creditors.
Monday's meeting in Brussels came amid tensions within the ECB's governing council over Draghi's plan to buy more government bonds.
Bundesbank President Jens Weidmann, Germany's member of the ECB governing council, is opposed to a bond-purchasing program. A report in the mass-circulation newspaper Bild reported last week that he had even threatened to resign over the plans, although Weidmann declined to comment.
rc /jm (AFP, dpa)