Moody's adjusts ratings of 9 European sovereigns

continues to be well supported by a large, diversified and highly
competitive economy, a particularly flexible labour market,
and a banking sector that compares favourably to peers in the euro area.
The economy generally benefits from the significant structural reforms
undertaken in the past. As a result of these strong structural
features, Moody's expects the UK to eventually return to its
trend growth rate of around 2.5%, although the return
to trend growth is expected to be slower than originally expected,
reflecting the nature and depth of the financial crisis.
The current fiscal consolidation programme remains intact and the government
has demonstrated its willingness and ability to take action to address
shortfalls. The UK has been proactive in pushing banks to hold
more capital and in taking steps to reduce the probability and impact
of the sovereign having to use its own balance sheet to support British
banks. Further, the outstanding debt stock has important
structural features that give the UK government a very high shock-absorption
capacity.
The government is implementing an ambitious fiscal consolidation programme
and so far has been meeting , and even exceeding, its deficit
reduction forecasts. In the Autumn Statement, the Office
for Budget Responsibility (OBR) announced weaker economic growth forecasts,
to which the government responded by announcing further spending cuts,
both over the medium and long term. Although Moody's sees
rising challenges in achieving debt reduction within the timeframe that
has been laid out by the government - not least the possible impact
of any future cutbacks on short-term growth - the rating
agency believes that the UK government's response to negative developments
late last year indicates its commitment to restoring a sustainable debt
position. This suggests that the UK's track record of reversing
increases in debt is likely to continue going forward.
The UK's Aaa rating is also supported by the robust structure of
government debt. The UK has the lowest refinancing risk of all
the large Aaa economies, based on the average maturity of the UK's
debt stock (nearly 14 years), its large domestic investor base,
and the willingness and ability of its central bank to undertake accommodative

monetary policy.
WHAT COULD MOVE THE RATING DOWN
The UK's Aaa rating could potentially be downgraded if Moody's
were to conclude that debt metrics are unlikely to stabilise within the
next 3-4 years, with the deficit, the overall debt
burden and/or debt-financing costs continuing on a rising trend.
This could happen in one of three scenarios, all of which would
imply lower economic and/or government financial strength: (1) a
combination of significantly slower economic growth over a multi-year
time horizon - perhaps due to persistent private-sector deleveraging
and very weak growth in Europe - and reduced political commitment
to fiscal consolidation, including discretionary fiscal loosening
or a failure to respond to a deteriorating fiscal outlook; (2) a
sharp rise in debt-refinancing costs, possibly associated
with an inflation shock or a deterioration in market confidence over a
sustained period; or (3) renewed problems in the banking sector that
force a resumption of official support programmes and spill over into
the real economy, indirectly causing lower growth and larger budget
deficits.
Conversely, the rating outlook could return to stable if the combination
of less adverse macroeconomic conditions, progress towards containing
the euro area crisis and deficit reduction measures were to ease medium-term
uncertainties with regards to the country's debt trajectory.

REGULATORY DISCLOSURES
Although the following credit ratings have been issued in a non-EU
country which has not been recognized as endorsable at this date,
these credit ratings are deemed "EU qualified by extension"
and may still be used by financial institutions for regulatory purposes
until 30 April 2012. Further information on the EU endorsement
status and on the Moody's office that has issued a particular Credit
Rating is available on www.moodys.com.
Government of Finland
Government of Malta
Government of Portugal
Government of Slovakia
Fondo de Reestructuracion Ordenada Bancario
Malta Freeport Corporation Limited
For ratings issued on a program, series or category/class of debt,
this announcement provides relevant regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides relevant regulatory disclosures in relation
to the rating action on the support provider and in relation to each
particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides relevant regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on
www.moodys.com.
The ratings Government of France, Government of Germany, Government
of Italy, Government of Luxembourg, Government of Netherlands
and Government of United Kingdom were initiated by Moody's and were not
requested by these rated entities.
All rated entities or their agents participated in the rating process.
The rated entities or their agents provided Moody's access to the
books, records and other relevant internal documents of the rated
entity.
The ratings have been disclosed to the rated entities or their designated
agent(s) and issued with no amendment resulting from that disclosure.
Information sources used to prepare the ratings for Governments of Slovenia,
Slovakia, Portugal, Malta and Malta Freeport Corporation Limited
are the following: parties involved in the ratings, parties
not involved in the ratings, and public information.
Information sources used to prepare the ratings for Governments of France,
Italy, Societe de Financement de L'Economie Francaise and
Societe de Prise de Participation de l'Etat are the following: parties
involved in the ratings, public information, and confidential
and proprietary Moody's Investors Service information.
Information sources used to prepare the ratings for Government of United
Kingdom and Bank of England are the following: parties involved
in the ratings, parties not involved in the ratings, public
information, confidential and proprietary Moody's Investors
Service information, and confidential and proprietary Moody's
Analytics information.
Information sources used to prepare the ratings for Government of Spain
are the following : parties involved in the ratings, parties
not involved in the ratings, public information, and confidential
and proprietary Moody's Investors Service information.
Information sources used to prepare the ratings for Fondo de Reestructuracion
Ordenada Bancario are the following: parties involved in the ratings,
and public information.
Moody's considers the quality of information available on the rated
entities, obligations or credits satisfactory for the purposes of
issuing these ratings.
Moody's adopts all necessary measures so that the information it
uses in assigning the ratings is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Moody's Investors Service may have provided Ancillary or Other Permissible
Service(s) to the rated entities or their related third parties within
the two years preceding the credit rating action. Please see the
special report "Ancillary or other permissible services provided
to entities rated by MIS's EU credit rating agencies" on the
ratings disclosure page on our website www.moodys.com for
further information.
The below contact information is provided for information purposes only.
Please see the issuer page on www.moodys.com for Moody's
regulatory disclosure of the name of the lead analyst and the office that
has issued the credit rating.
The relevant Releasing Office for each rating is identified in "Debt/deal
box" on the Ratings tab in the Debt/Deal List section of each issuer/entity
page of the Website. A link from the Releasing Office name is provided
to lead to the full address of the respective MIS Releasing Office.

(New York Ratings Team)