Moody's warns US, Europe countries on rising costs
Moody's is warning the US, France, Germany and the United Kingdom that they need to better control the rising costs of pensions and health care subsidies.business Updated: Jan 13, 2011 20:30 IST
Moody's is warning the US, France, Germany and the United Kingdom that they need to better control the rising costs of pensions and health care subsidies.
The ratings agency noted on Thursday that the US and Britain have had the steepest increases in government debt. The US launched a $600 billion Treasury-bond buying program recently in an effort to stimulate the economy. Moody's said, however, that all four countries still have balance sheets that are compatible with their triple-A ratings, despite pricey government programs meant to prevent a return to recession.
Looking at the longer term, Moody's said the countries face "dramatic increases" arising from aging-related pension and health care subsidies. "These future costs must be brought under control if these countries are to maintain long-term stability in their debt burden credit metrics," Moody's says.
The warning is part of Moody's "Aaa Sovereign Monitor," a regular report that focuses on potential outcomes of fiscal policies over the next four years.
First Published: Jan 13, 2011 20:28 IST