Euro Area Debt Quality Worsens at Record Pace: Chart of the Day
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The euro area’s credit quality is fading at an unprecedented pace, posing a risk to the region’s main tool against the debt crisis as leaders struggle to convince investors they have the situation under control.
The CHART OF THE DAY shows the average rating for the bloc, calculated by Bloomberg from the assessments of the three main evaluators, has worsened to 3.14, representing the third-best grade, from 2.12 in May 2010 when the European Financial Stability Facility was designed. The measure fell 0.23 point in the previous 15 months. The average is calculated by giving a numerical grade for each grading, where 1 is the highest, and adjusting it for each country’s share of the EFSF guarantee.