Difficulties continue to pile up for the European Union, after the region's second biggest economy received a warning from one of the three major ratings agencies, according to Reuters.
France, second only to Germany in the euro zone, heard from Moody's Investors Service on Monday, October 18. Moody's noted that the country looks to suffer substantial strain through its efforts to contain the Greek debt crisis.
French banks are some of the most exposed to the crisis in Greece, and many expect the plan to address the situation to include boosting capital in some of those banks. Moody's suggests that the country could receive a negative outlook for its credit rating depending on the scale of these bailouts.
According to a Bloomberg report, the news has put downward pressure on the region's common currency, the euro, which had been in the midst of a revival as European leaders seemed to be coming to a consensus on how to address the issue.
"Europe’s problems are going to take years to resolve," Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia, told Bloomberg. "One meeting is not going to fix it. Reality is setting in this week, and that’s going to see euro long positions being cut."