Search
00
GBAF Logo
trophy
Top StoriesInterviewsBusinessFinanceBankingTechnologyInvestingTradingVideosAwardsMagazinesHeadlinesTrends

Subscribe to our newsletter

Get the latest news and updates from our team.

Global Banking & Finance Review®

Global Banking & Finance Review® - Subscribe to our newsletter

Company

    GBAF Logo
    • About Us
    • Profile
    • Privacy & Cookie Policy
    • Terms of Use
    • Contact Us
    • Advertising
    • Submit Post
    • Latest News
    • Research Reports
    • Press Release
    • Awards▾
      • About the Awards
      • Awards TimeTable
      • Submit Nominations
      • Testimonials
      • Media Room
      • Award Winners
      • FAQ
    • Magazines▾
      • Global Banking & Finance Review Magazine Issue 79
      • Global Banking & Finance Review Magazine Issue 78
      • Global Banking & Finance Review Magazine Issue 77
      • Global Banking & Finance Review Magazine Issue 76
      • Global Banking & Finance Review Magazine Issue 75
      • Global Banking & Finance Review Magazine Issue 73
      • Global Banking & Finance Review Magazine Issue 71
      • Global Banking & Finance Review Magazine Issue 70
      • Global Banking & Finance Review Magazine Issue 69
      • Global Banking & Finance Review Magazine Issue 66
    Top StoriesInterviewsBusinessFinanceBankingTechnologyInvestingTradingVideosAwardsMagazinesHeadlinesTrends

    Global Banking & Finance Review® is a leading financial portal and online magazine offering News, Analysis, Opinion, Reviews, Interviews & Videos from the world of Banking, Finance, Business, Trading, Technology, Investing, Brokerage, Foreign Exchange, Tax & Legal, Islamic Finance, Asset & Wealth Management.
    Copyright © 2010-2026 GBAF Publications Ltd - All Rights Reserved. | Sitemap | Tags | Developed By eCorpIT

    Editorial & Advertiser disclosure

    Global Banking & Finance Review® is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

    Home > Headlines > Euro zone sovereign ratings diverge the least since debt crisis
    Headlines

    Euro zone sovereign ratings diverge the least since debt crisis

    Published by Global Banking & Finance Review®

    Posted on September 19, 2025

    3 min read

    Last updated: January 21, 2026

    A large crowd of protesters in London rallies against the ban of Palestine Action, holding flags and placards. This image captures the tension during the protest where over 466 individuals were arrested by police, highlighting the ongoing conflict surrounding Palestine Action and its implications.
    Protesters gather in London against the ban of Palestine Action - Global Banking & Finance Review
    Why waste money on news and opinion when you can access them for free?

    Take advantage of our newsletter subscription and stay informed on the go!

    Subscribe

    Tags:debt sustainabilityCredit ratingseconomic growthfinancial marketsinstitutional investors

    Quick Summary

    Euro zone credit ratings are converging, with France downgraded and Spain and Portugal upgraded, reflecting economic alignment.

    Table of Contents

    • Analysis of Euro Zone Credit Ratings
    • Recent Rating Changes
    • Impact on Investors
    • Economic Growth and Debt Levels

    Euro zone sovereign ratings diverge the least since debt crisis

    Analysis of Euro Zone Credit Ratings

    By Yoruk Bahceli

    Recent Rating Changes

    LONDON (Reuters) - The gap between euro zone governments' credit ratings is at its narrowest since 2010, Citi data shows, with a French downgrade and upgrades for Spain and Portugal underscoring increasing convergence among member states' economic fortunes.

    Impact on Investors

    Fitch downgraded France to 'A+' last Friday after a government collapse complicated its already challenged deficit reduction effort. The same day, S&P Global upgraded Spain to the same score, citing its economic strength, and Fitch upgraded Portugal to 'A' on the strength of its debt reduction.

    Economic Growth and Debt Levels

    Fitch had downgraded Finland, Austria and Belgium over the summer because of high deficits and debt, accelerating a steady convergence over the last decade - driven mainly by poorer countries recovering from the 2010-11 debt crisis and their economic prospects improving after the 2020 COVID crisis.

    The ratings moves illustrate the debt trajectory within the euro zone, said Carmignac fund manager Aymeric Guedy.

    Southern countries are catching northern peers not only by narrowing their debt but also with better growth, Guedy said. Higher growth helps keep debt levels in check.

    Following the bloc's debt crisis, several governments lost their AAA ratings, leaving only Germany and the Netherlands with a top score among major euro zone economies. Portugal and Greece were for a time downgraded to "junk" scores, which constrained who could buy their debt.

    Fitch was set to review Italy's rating later on Friday.

    Analysts said an upgrade to BBB+ was likely following a similar move from S&P in April, which would raise Italy further away from the cusp of "junk" and narrow the gap further.

    On Thursday, French and Italian 10-year bond yields traded at the same level for the first time.

    Rating agencies move more slowly than markets, so government borrowing costs reflected convergence between the north and south well before ratings. Indeed, bond market reaction to Fitch's France downgrade was restrained.

    But ratings still matter as changes can trigger buying and selling by investors with rating restrictions. Long-term investors like central banks and pension funds also favour investments with higher ratings.

    "The official changes will matter and can drive further reallocations, particularly for institutional investors," said Ross Hutchison, head of euro zone market strategy at Zurich Insurance Group.

    Aman Bansal, senior European rates strategist at Citi, said the rating convergence could encourage some international investors to shift some holdings of French bonds towards Spain and possibly Italy.

    Foreign investors own 55% of France's debt, a higher share than in other euro zone countries, making it more vulnerable to shifts in confidence.

    (Reporting by Yoruk Bahceli; editing by Dhara Ranasinghe and Kevin Liffey)

    Key Takeaways

    • •Euro zone credit ratings are converging, narrowing gaps.
    • •France's credit rating was downgraded by Fitch.
    • •Spain and Portugal received credit upgrades.
    • •Southern countries are catching up with northern peers.
    • •Investors may shift holdings due to rating changes.

    Frequently Asked Questions about Euro zone sovereign ratings diverge the least since debt crisis

    1What is a credit rating?

    A credit rating is an assessment of the creditworthiness of a borrower, indicating the likelihood of default on debt obligations. It helps investors gauge the risk associated with lending money.

    2What is economic growth?

    Economic growth refers to the increase in the production of goods and services in an economy over a period. It is typically measured by the rise in Gross Domestic Product (GDP).

    3What are institutional investors?

    Institutional investors are organizations that invest large sums of money on behalf of clients, such as pension funds, insurance companies, and mutual funds. They play a significant role in financial markets.

    4What is convergence in economics?

    Convergence in economics refers to the process where poorer economies grow at a faster rate than richer ones, leading to a reduction in income disparities over time.

    More from Headlines

    Explore more articles in the Headlines category

    Image for Former French minister Lang resigns from Arab World Institute over Epstein ties
    Former French minister Lang resigns from Arab World Institute over Epstein ties
    Image for Hooded protesters throw flares at police at end of demonstration in Olympic host city Milan
    Hooded protesters throw flares at police at end of demonstration in Olympic host city Milan
    Image for Greenland foreign minister says US talks are positive but the outcome remains uncertain
    Greenland foreign minister says US talks are positive but the outcome remains uncertain
    Image for Hungary's opposition Tisza promises wealth tax, euro adoption in election programme
    Hungary's opposition Tisza promises wealth tax, euro adoption in election programme
    Image for Thousands protest in Berlin in solidarity with Iranian uprisings
    Thousands protest in Berlin in solidarity with Iranian uprisings
    Image for Farmers report 'catastrophic' damage to crops as Storm Marta hits Spain and Portugal
    Farmers report 'catastrophic' damage to crops as Storm Marta hits Spain and Portugal
    Image for France opens probe against ex-culture minister lang after Epstein file dump
    France opens probe against ex-culture minister lang after Epstein file dump
    Image for If US attacks, Iran says it will strike US bases in the region
    If US attacks, Iran says it will strike US bases in the region
    Image for Suspected saboteurs hit Italian rail network near Bologna, police say
    Suspected saboteurs hit Italian rail network near Bologna, police say
    Image for Olympics-Protesters in Milan denounce impact of Games on environment
    Olympics-Protesters in Milan denounce impact of Games on environment
    Image for Olympics-Biathlon-Winter Games bring tourism boost to biathlon hotbed of northern Italy
    Olympics-Biathlon-Winter Games bring tourism boost to biathlon hotbed of northern Italy
    Image for US pushes Russia and Ukraine to end war by summer, Zelenskiy says
    US pushes Russia and Ukraine to end war by summer, Zelenskiy says
    View All Headlines Posts
    Previous Headlines PostFactbox-Why Moldova's upcoming parliamentary election matters
    Next Headlines PostFinland says no to more joint EU debt