Summary Moody's cut the AAA rating of the European Stability Mechanism euro rescue fund.
BERLIN: Rating agency Moody s has stripped the eurozone s new €500 billion ($615 billion) bailout fund of its top credit rating.
Moody s announced Friday to downgrade the European Stability Mechanism s long-term debt rating from AAA to Aa1, maintaining a negative outlook.
The agency said its decision was driven by its earlier downgrade of France. The eurozone s second-largest economy guarantees a sizable part of the ESM s loan capacity.
ESM chief Klaus Regling called the decision "difficult to understand," saying it does "not sufficiently acknowledge ESM s exceptionally strong institutional framework, political commitment and capital structure."
The ESM one of the 17-nation eurozone s key tools in fighting off its debt crisis continues to be assigned a top-notch long-term rating by Fitch. Moody s and Fitch also see the fund s short-term credit rating as AAA.
