Portugal Credit Downgraded by Fitch Ratings

Portugal Sovereign Debt

Fitch Ratings downgraded the long-term credit of Portugal from AA to AA-, reinforcing the depth of the crisis Europe and the euro continue to face.

Pierre-Oliver Beffy, chief economist at Exane, said sovereign risk will continue to be an issue in the region for another 5-10 years. Beffy added, "We think that the Fitch comment is very lagged and reflects the adjustment of rating to lower growth outlook in countries where austerity plans are implemented."

Almost everywhere I read this has attempted to be made to look like an irrelevant event, but in fact it's extremely important, not simply as a reminder of the problems facing Europe and the euro, but as a mirror of the reality of the depth of those problems.

We probably haven't even began to see the consequences of the problems in Europe yet, and that's not only in reference to Portugal, Italy, Ireland, Greece and Spain. Other countries are struggling as well, although that's not as easy to discern on the surface as the more obvious PIIGS are.

Portugal Sovereign Debt