France and Germany underlined a commitment to the stability of the eurozone late on Monday after a leading credit rating agency threatened an unprecedented mass downgrade for 15 eurozone countries.

Leading credit rating agency Standard & Poor's warned late on Monday that both France and Germany - as well as 13 other nations - were in imminent danger of losing their triple-A debt ratings.

Berlin and Paris responded quickly with a joint statement, saying that "all necessary measures" would be taken to ensure the stability of the eurozone.

"France and Germany, in full solidarity, confirm their determination to take all the necessary measures in liaison with their partners and the European institutions to ensure the stability of the euro area," read the statement.

"France and Germany reaffirm that the proposals they made jointly today will reinforce the governance of the euro area in order to foster stability, competitiveness and growth."

The statement said the two governments had taken note of the possible downgrade.

On the 'negative watch list'

Austria, Finland, Luxembourg and the Netherlands - which, like France and Germany, enjoy the highest possible credit rating - were also threatened with a downgrade on their long-term debt in the coming months.

The action was "prompted by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole," a statement from S&P read.

Nine eurozone countries with credit ratings lower than triple-A were also placed on the S&P's "negative watch list" late on Monday. Cyprus and Greece, which already suffer from poor credit ratings, were the only eurozone countries not to be threatened with a further downgrade by the agency.

S&P said ratings could be lowered by one notch for Austria, Belgium, Finland, Germany, Luxembourg and the Netherlands and by up to two notches for the other nine countries. Inclusion on the list means the agency believes there is a 50 percent chance of a downgrade within the next few months.

Plan for new treaty

German Chancellor Angela Merkel and French President Nicolas Sarkozy had met earlier on Monday, ahead of an EU summit in Brussels on Thursday and Friday.

Speaking at a joint press conference in Paris following lengthy talks, Merkel had already emphasized the commitment of both leaders to the stability of the euro and a strengthening of the competitiveness of the eurozone.

The leaders called for a new European treaty that would include automatic sanctions for member states that violate fiscal rules. Merkel said the European Court of Justice should be able to verify that national eurozone budgets conform to the proposed new anti-deficit rules.

Merkel and Sarkozy were also in agreement on the controversial subject of eurobonds, saying they were not a solution to the debt crisis.

Merkel and Sarkozy said they would propose bringing forward the introduction of the European Stability Mechanism, scheduled for 2013, to the end of next year.

Author: Richard Connor (AFP, Reuters)
Editor: Holly Fox