France's AAA Outlook Cut as FITCH Reviews Ratings of Italy, Spain, Belgium...

Fitch Ratings lowered France’s rating outlook and put the grades of nations including Spain and Italy on review for a downgrade, citing Europe’s failure to find a “comprehensive solution” to the debt crisis.

Fitch changed its outlook on France to negative, while affirming its AAA rating. It also placed Spain, Italy, Belgium, Slovenia, Ireland and Cyprus on a “Rating Watch Negative” review, which it expects to complete by the end of January, according to a statement released today in London.

The move raises pressure on European leaders after Fitch said on Dec. 12 that the lack of a comprehensive solution at a European Union summit this month increased pressure on sovereign ratings. EU heads, in their fifth attempt to end the debt crisis now in its third year, agreed to forge a tighter fiscal union as the main thrust of their efforts, even as the European Central Bank resists investor calls to step up its bond-buying program.

“Of particular concern is the absence of a credible financial backstop,” Fitch said in an e-mailed statement. In the company’s opinion, “this requires more active and explicit commitment from the ECB.”

Without a full solution, Fitch said the crisis will persist, “punctuated by episodes of severe financial market volatility that is a particular source of risk to the sovereign governments of those countries with levels of public debt.”

[link to www.bloomberg.com]