http://seekingalpha.com/article/317943-new-twists-in-hungarian-drama-the-end-of-the-aaa-era-and-credit-markets-chart-update
'The End of the "AAA" Era
Meanwhile, Germany and France are evidently coming to terms with the fact that their debt may soon no longer be rated AAA and that thereby the world's pool of risk-free collateral is doomed to shrink even further. There would of course be a way to circumvent the pending downgrades: if the ECB were successfully instructed to flaunt the spirit of the law and outright QE could be pursued with the aid of some clever legal trick, as Irish finance minister Noonan once suggested, then the rating agencies would likely adopt a wait and see approach (according to their own words). Alas, this is what Germany will definitely not allow to happen – hence, perversely, because it tries to be disciplined, it must fear for its credit rating! Apparently it matters though in which order the downgrades come hailing down.
As Reuters reports:
“The German and French governments have both come to accept that the era when leading eurozone countries enjoyed the very best sovereign debt ratings is nearing an end, but a downgrade could shake Paris far harder than it does Berlin.
Markets have been bracing for a cut in the triple-A rating of France and possibly other top-rated euro zone members since Standard & Poor's warned in early December of a mass downgrade due to concerns about the bloc's two-year old debt crisis.
Such a move in theory makes it more expensive for countries to borrow, ruling out buying by certain types of investors as well. If S&P were to follow through in the coming weeks and slash euro zone ratings across the board, economists say the financial and political backlash would be tolerable, as it has been for the United States since the rating agency controversially cut its debt last August....'
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