On Monday the ratings agency put 15 eurozone nations including France and Germany on creditwatch negative, citing concerns over policymakers’ ability to tackle the sovereign debt crisis.
It said it aimed to complete the review as soon as possible after this week’s EU summit.
It has now placed the European Union’s own AAA rating on negative creditwatch and warned of a one notch cut if eurozone countries are downgraded.
“Our review will focus on the financial ability of eurozone member states to support the EU’s debt service should the institution face a period of financial distress,” said S&P analysts Frank Gil and Moritz Kraemer.
S&P said the potential downgrade would have no impact on the credit rating of non-eurozone EU countries, but separately warned large eurozone banks including BNP Paribas and Deutsche Bank would also be candidates for downgrades in the event of cuts to eurozone sovereign credit ratings.
