Moody's slashes AAA-rating on ESM fund

Credit rating agency Moody's Investor Services has downgraded its rating of the European Stability Mechanism (ESM) - Europe's bailout fund - because of increased concerns over the financial health of France.

Moody's has cut its AAA-rating by one notch, to Aa1, in a move which comes after the agency downgraded France, one of the main supporters of the ESM, in November. Klaus Regling, managing director of the rescue fund and chief executive of the fund's predecessor the European Financial Stability Facility (EFSF), criticised the decision, describing it as "difficult to comprehend". Moody's said the decision was a direct result of the body's earlier downgrade of France. It said it "reflects the rating agency's view that there has been a marginal diminution in the certainty that the sover...