Credit Rating Agency Moody’s have announced downgrades for a number of Euro zone nations. It has also issued a negative outlook for the UK. This could spell problems for the UK’s AAA credit rating.

It’s only Monday and it has been a busy week already. Greece yesterday approved further austerity measures to avoid a default and continue talks with the rest of the euro zone.

Moody’s have confirmed that there is a 30% chance that the UK will lose its triple AAA credit rating if it gets dragged further into the euro zone crisis. It cited increased uncertainty relating to the possibility of weaker growth over the coming years. This would potentially have a knock on effect with the government’s plans to reduce the budget deficit by 2015-16. The effects of political and fiscal shocks with the euro zone were also perceived as a possible danger to the UK economy.

Moody’s confirmed that ‘while the UK currently enjoys "safe haven" status, there is also a growing risk that the weaker macroeconomic outlook could damage market confidence in the government's fiscal consolidation programme and cause funding costs to rise.’

Euro zone downgrades

The credit rating agency also confirmed a downgrade on France’s credit rating to negative in its statement.

The French rating has been deemed negative of its AAA rating, as institutional reform with in the euro zone seems less likely, combined with the outlook for poor growth over the next few years.

Concerns about the way the French government values its debt has caused concern when assessed against other AAA countries.

Other European countries that were downgraded included Italy, Portugal, Spain, Slovakia, Slovenia and Malta. These downgrades follow the recent downgrade from Standard and Poors a month ago.