Germany reacted to Moody’s decision to put a negative watch on the nation’s Aaa-rated sovereign debt. In essence, the government said it can maintain a wall between its economy and the balance of the eurozone, which does not seem likely given recent data about the status of its financial health. Part of the reaction, according to Bloomberg, was:
“Germany will, through solid economic and financial policy, defend its ‘safe haven’ status and continue to responsibly maintain its anchor role in the euro zone,” the ministry said in an e-mailed statement. “Together with its partners, it will do everything to overcome the sovereign debt crisis as rapidly as possible.”
The nation does have the advantage, which it shares with the United States, that global capital markets investors have run out of places to invest. Even with a recession in sight, German and American debt appear attractive.
Douglas A. McIntyre
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