Badness in Europe

One of the big dark clouds hanging over our economy is our very close ties to Europe. If the European economy tanks, we will be pulled down with it. This is a fact. S&P has downgraded France and just about everyone else in Europe except for Germany.

From WSJ:

France and eight other euro-zone countries suffered ratings downgrades on their sovereign debt Friday, sparking renewed global worries over Europe’s ability to bail itself out of financial crisis.

Standard & Poor’s Ratings Services stripped triple-A ratings from France and Austria and downgraded seven others, including Spain, Italy and Portugal. It retained the triple-A rating on Europe’s No. 1 economy, Germany.

The downgrade to France, the zone’s second-largest economy, will make it harder—and potentially more expensive—for the euro zone’s bailout fund to help troubled states, because the fund’s own triple-A rating depends on those of its constituents. The downgrades also speak to how deeply the concerns over countries on the euro zone’s periphery have penetrated its core.

Oh, and don’t forget Greece. Their debt talks have collapsed.