E.U. Leaders Still Disagree as Crisis Simmers

News elsewhere was also far from cheery. In the U.K., Thursday numbers revealed that the country was sinking deeper into recession. After a week of economic reports in a similar vein, pressure has increased on Prime Minister David Cameron to embark on measures to stimulate growth. His opposition blames the austerity policies he and his party put in place for the downturn in the British economy.

Voters are turning against Cameron even as his spokesman characterized the present economic climate as "the worst financial and debt crisis of our lifetime." Regional elections earlier in the month took a heavy toll on Cameron's Conservatives and the Liberal Democrats who are their coalition partners.

Patrick Dunleavy, a professor of politics and the London School of Economics, was quoted saying, "Cameron is coming under pressure because his strategy isn't working."

Meanwhile, Moody's downgraded several Nordic banks, despite their having some of the best ratings in Europe, saying that their reliance on wholesale funding has exposed them to volatility. In separate statements, the ratings agency lowered Nordea Bank AB and Svenska Handelsbanken AB of Sweden by one level to Aa3, and Norway's DNB Bank ASA by one to A1. SEB AB and Swedbank AB retained their current ratings and Landshypotek AB saw its grade fall by two levels to Baa2.

Moody's took the action on the Swedish banks, it said, because of their "comparatively high reliance on wholesale funding, which Moody's regards as less reliable under a severe stress scenario." Still, it continued, "Moody's acknowledges the relatively good capital markets access for most Swedish banks despite difficult market conditions in recent years."

It cited other factors in its decision as "modest profitability" and risks to asset quality. Its statement added, "Moody's recognizes that the Swedish economy has so far performed well compared with other European Union economies, and Swedish banks have been able to attract market funding on economic terms from international investors. Furthermore, Swedish banks have strengthened their capitalization since 2008."

However, ratings firms' credibility has suffered of late. The Nordic countries have responded by largely dismissing the ratings changes, with Goran Bronner, CEO of Swedbank, saying that Moody's is "backward looking." He told Swedish banks not to pay too much attention. In Denmark, banks have gone further, with some firing Moody's after being told by large Danish investors that such ratings have limited value.