High deficits weigh on multinational sovereign credit

The deteriorating public finances of People's Daily in the people's Daily are affecting the global nerves. BEIJING December 16 Electric Comprehensive newspaper in Spain reporter Zhangjinjiang, in Mexico correspondent Wang Xinping and our correspondent Wu Chengliang reports: International credit rating agencies have frequently lowered the sovereign credit rating of many countries, or to their credit prospects issued early warning.　　Some countries, characterized by high deficits and high debt, have a deteriorating public finances that affect the nerves of the world. International rating agencies have been warned today, European Union countries have lit Christmas lights to greet the festival, but for some European Union leaders, this Christmas is heavy. For now, many euro-zone countries have more fiscal deficits and public debt than the GDP and 60% per cent of the EU Stability and Growth Pact. International credit rating agencies have issued early warning to several EU countries. After the Greek sovereign credit rating was downgraded from a a-to BBB, Portugal and Spain's sovereign credit-rating outlook was also downgraded by the standard and poor rating company.　　The International credit rating agency warns that even countries such as France and Germany, which have a long AAA rating of sovereign credit, are at risk of a fiscal crisis if they fail to address the deficit problem. The CEE countries, which are closely related to the EU economy, are also not optimistic about their finances.　　10th, the European Central Bank issued a report that Lithuania, Latvia and Estonia if the three countries can not take effective measures to reduce the fiscal deficit, is likely to face a new round of debt crisis. Nor has Mexico escaped the fate of its sovereign credit rating being lowered. The ratings agency issued a 14th announcement to downgrade Mexico's sovereign credit rating from BBB to BBB. However, the outlook for Mexico's credit rating is at a stable level. The company speculated that Mexico's economy would remain low by about 3% to 4% in the next few years, affected by the recession in the US. The Mexican central bank expects the Mexican economy to shrink 7.5% this year, the biggest drop since the Great Depression. In addition, Mexico's oil production plummeted this year, hitting Mexico, which relies on the oil industry for nearly 30% of its revenues.　　Some experts speculate that Mexico's fiscal deficit next year will reach its highest level in 20 years. It is noteworthy that the United States and Britain have also been warned by international credit rating agencies.　　Moody's Investors Service has said it will look at the policy responses to the worsening fiscal situation in the two countries, although there are no plans to revise the AAA credit rating in the US and UK. Countries face a step forward in order to rectify the fiscal order of countries. The meeting of eurozone finance ministers, held in early December, set a deadline for the fiscal deficits of most Member States, urging countries to take measures to reduce deficits and reduce debt. The Greek government 14th unveiled plans to cut its fiscal deficit to restore confidence among investors and EU partners. Greek Prime Minister George Papandreou has pledged to reduce the deficit to 3% of GDP by 2013, in line with EU rules. Mr Papandreou also described a road map to achieve this goal, mainlyMeasures to cut expenditure, reduce public spending and raise taxes. In the face of a downgrade of the sovereign credit rating, the Mexican Ministry of Finance said 14th that standard Poole's latest rating for Mexico means Mexican bonds are still at the investment level. The Mexican government has now implemented a series of measures to adjust the budget, reduce administrative expenditure, and increase investment in social investments and infrastructure construction. At the same time, the Government is also reforming the pension system.　　The Mexican Ministry of Finance said these reforms will promote Mexico's economic development and maintain a stable investment environment. However, the debt-relief plan will inevitably bring about an economic tightening effect, which could hurt the economic recovery and even put the economy deeper into recession. As a result, the Governments concerned are facing tough choices about whether to cut their debts immediately. Some highly indebted countries are in no hurry to introduce debt relief schemes. Britain's finance minister, Darling, said 15th that when the economy recovers, the government will cut its budget deficit by half, but it must ensure that the recovery is maintained. He said Britain would not follow Greece in order to support the economy.　　The British government will make its own decision on the timing of the debt reduction scheme. Comment on Zhu Xiaozhong (researcher of Russian Institute of Central and Eastern Asia) the Middle East Europe economy is moving slowly this year, and some Central and eastern European economies hit by the financial crisis are expected to resume growth for a long time. Recently, the financial situation in some countries of the region has deteriorated, if the degree of further deepening does not exclude the possibility of the international rating agencies to reduce their sovereign credit rating. The credit rating not only reflects the financial and financial situation of a country, but also reflects the political stability of the country to some extent. So credit ratings can be said to be a combination of economic and political conditions.　　Overall, the assessment by international rating agencies of the CEE countries basically reflects the realities of these countries. Xuecheng (Executive director of the China Institute of International Economic Relations) sovereign credit rating is an assessment of the solvency of a country's external debt, which is related to the international image, economic strength and capital cost of a country, and is an important reference index in financial market. After the outbreak of the international financial crisis, some countries, due to the large amount of funds to bail out, resulting in heavy government debt burden, the sovereign credit rating is facing a downward trend. Small and medium-sized countries, especially the weaker developing countries, are the first. As a result, international credit rating agencies have recently issued warnings or downgraded their ratings to some national sovereign credits. On the other hand, in the financial crisis, some emerging market economies such as China, Brazil and so on, the economic recovery is strong, fiscal soundness, the rating agencies can not ignore this reality, their credit rating slightly upward. Overall, the world famous credit rating agencies to the National sovereign credit ratings, can reflect some trends. However, the ratings agencies have been widely criticized for their previous ratings on Wall Street's financial products. The three international rating agencies--Standard Poole, Moody's, Fitch--have long monopolized international financial discourse and done something biased. Therefore, the people of Insight called for the International sovereign credit rating system should have a more fair and objective standards.