Will a major global rating agency (S&P, Moody's, Fitch) downgrade the sovereign credit rating of Germany before the end of 2027?

Germany Credit Rating Downgrade by 2027

Germany is the economic powerhouse of the Eurozone and currently holds top-tier (AAA or equivalent) credit ratings from all major agencies. This prediction states that one of the major global rating agencies will downgrade Germany's sovereign credit rating before the end of 2027.

Energy Transition and Fiscal Headwinds

The strong 'No' reflects Germany's deep economic fundamentals and fiscal discipline. A 'Yes' scenario would be driven by:

• **De-industrialization:** The accelerated decline of energy-intensive industries due to permanently high energy prices following the war in Ukraine.
• **Fiscal Strain:** Sustained, high defense spending combined with massive investments needed for the green transition, leading to breach of constitutional debt brakes.
• **Banking Exposure:** Major exposure to a severe downturn in the troubled commercial real estate sector.

A downgrade would be an earthquake for the Eurozone, signaling the deep, structural challenges facing Europe's largest economy.