The European crisis is not showing any signs of fading off. The confusion on how to fund any Iceland debt requirement by the European heavy weights, has forced Moody’s to downgrade Iceland rating to negative from Stable.
This rating downgrade would make life more difficult for Iceland and also for other troubled European countries namely Spain, Greece and Portugal. Over the coming days, we might see further downgrades of some more weak European nations mentioned above.
That could be a overall dragger for the entire European Zone which does not augur well for the global economy as a whole. The inflation has already started rearing it’s head in the last few weeks, and that could only make the European recovery that much more difficult.