European Commissioner lashes out after S&P downgrade

Economic and monetary affairs commissioner, Olli Rehn has slammed Standard & Poor's (S&P) credit downgrade of the European Union branding the decision "inconsistent."

He said:

The Commission's view is that the EU credit rating should be essentially assessed on its own merits, due to the very strong budget revenues and the treaty obligation from the 28 Member States to always balance the EU budget.

On Friday the EU lost its prized AAA credit rating and was downgraded to A - 1 +. S&P said the EU's financial profile had deteriorated and that cohesion among member states had diminished. Growth within Eurozone is running at a lacklustre 1.1 per cent. Average unemployment remains stubbornly high at 12.2 per cent.

German Chancellor Angela Merkel used the opportunity to urge EU leaders to press ahead with economic reforms. Speaking on Friday she said:

The decision confirms my conviction that we in Europe still have a long road ahead of us before the confidence of investors is restored.

However, other European leaders did not draw the same conclusions from S&P's analysis. Belgian Prime Minister, Elio di Rupo told journalists "We must put it in perspective" and "It's just an opinion."

The decision came as a summit of the 28 member states enters its second and final day of talks in Brussels. The downgrade provided an embarrassing contrast with the UK which retained its AAA, rating but remains on negative watch.