The sovereign debt crisis downgrades for major European economies in recent months could be just the beginning, according to lengthy analysis by Citigroup. The US, Europe and even Germany could face further ratings cuts over the next three years, as the recession spreads through the region.
“We expect a string of further ratings downgrades for advanced-economy sovereign debt, and do not expect any ratings upgrades,” Citi analysts Michael Saunders and Mark Schofield wrote in the report.
On the other hand, Citi group economists say the only real European havens from downgrades will be Switzerland, Denmark, Norway and Sweden.
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