2:15 AM
McGhori
BRUSSELS: Efforts to stabilize Europe's financial crisis were thrown into disarray late on Monday as the 17 countries that use the euro braced for a possible downgrade of their credit ratings.
The leaders of France and Germany sought to restore confidence in the troubled European currency during the day with a joint call for changes to the European Union treaty so that countries using the euro would face automatic penalities if budget deficits ran too high.
Stock prices rose and borrowing costs for European governments dropped sharply in response to the changes proposed by French President Nikolas Sarkozy and German Chancellor Angela Merkel.
But on Monday night two people familiar with the matter said Standard & Poor's is examining the credit rating of all 17 eurozone countries for a possible downgrade as the continent's debt crisis lingers. They said S&P is likely to make an announcement on putting the euro countries on "credit watch" after the closing of markets in the US on Monday.
The threat to downgrade all 17 eurozone countries - including the ones that enjoy the stellar AAA-rating - comes ahead of a crucial summit of EU leaders later this week. If there is widespread support at the summit, it is assumed that would be an important first step in bringing an end to the crisis, which has dragged on for more than two years.
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