Europe's quest to avoid further recession has been dealt another crushing blow as Standard and Poor's downgraded nine countries yesterday, and it could have a big impact on New Zealand
France, Austria, Italy,Spain, Malta, Cyprus, Slovakia and Slovenia and Portugal were all downgraded.
Massey University Banking Specialist David Tripe says that may have a significant impact on New Zealand's economy.
He says a Euro collapse will most certainly bring a recession for New Zealand as our export markets would shrink.
"Reduced European demand for Chinese exports, reduced European demand for exports from various other countries as well but particularly if we look at China and south-east Asia, those are important markets," he says.
"That would push the exchange rate against the US dollar down, that would have an impact on increasing the relative prices of our exports and imports of of course most notably oil."
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