REUTERS/David Grey- Netherlands’ Arjen Robben (L) reacts after being fouled by Brazil’s Felipe Melo during their 2010 World Cup quarter-final soccer match in Port Elizabeth, July 2, 2010.
Downgrade of Netherlands leaves just three eurozone countries with triple-A ratings from Standard & Poor’s.
Standard & Poor’s has stripped the Netherlands of its AAA credit rating, saying that the country’s growth prospects have deteriorated and it is not performing as well as peers.
The Netherlands’ finance minister, Jeroen Dijsselbloem, said the downgrade was unsurprising “but disappointing.”
Mr Dijsselbloem, who is also president of the Eurogroup of finance ministers, has prescribed spending cuts and tax hikes to strengthen Dutch and other European government finances and pave the way for long-term growth.
Some economists say such austerity measures are counterproductive during a downturn, but the idea is popular in German-led policy-making circles.
Only three eurozone countries now remain with AAA ratings from S&P – Germany, Finland and Luxembourg – following the downgrade of the Netherlands to AA+.
However, they all have their status threatened by a negative outlook assigned by at least one of the three major rating agencies, Standard & Poors, Fitch and Moody’s.
Worldwide 10 countries retain AAA ratings from the three agencies. Of these only Sweden, Norway, Denmark, Switzerland, Australia, Canada and Singapore maintain a stable outlook on sovereign debt:
S&P said in a statement said: “The downgrade reflects our opinion that the Netherlands’ growth prospects are now weaker than we had previously anticipated.
“The “real GDP (gross domestic product) per capita trend growth rate is persistently lower than that of peers in similarly high levels of economic development.”
The long-term outlook for the Netherlands, the eurozone’s fifth-largest economy remained stable.
Earlier this month the country’s central statistics office (CBS) said the Dutch economy slowly moved out of recession in the third quarter with growth of 0.1pc. However, year-on-year the Dutch economy shrank by 0.6pc, the CBS said.