Standard & Poor’s Ratings Services placed its long-term sovereign ratings on much of the eurozone on CreditWatch with negative implications due to intensifying pressures in the region.

The rating agency said today that 15 members of the European Economic and Monetary Union (EMU or eurozone) have been placed on CreditWatch, prompted by its “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.”

S&P said that these systemic stresses stem from five interrelated factors: tightening credit conditions across the region; markedly higher risk premiums on a growing number of eurozone sovereigns; continuing disagreements among European policy makers on how to tackle the immediate market confidence crisis and, longer term, how to ensure greater economic, financial, and fiscal convergence among eurozone members; high levels of government and household indebtedness; and, the rising risk of economic recession in the region as a whole in 2012.

Currently, S&P expects output to decline next year in countries such as Spain, Portugal and Greece, but it now also assigns a 40% probability of a fall in output for the eurozone as a whole.

The rating agency’s review of eurozone sovereign ratings will focus on three of the five key factors that form the core of its sovereign ratings methodology: the “political,” “external,” and “monetary” scores assigned to the governments in the region.

The analysis of “political dynamics” will focus on both country-specific and eurozone-wide issues that appear to us to be limiting the effectiveness of efforts to resolve the market confidence crisis. Its analysis of “external liquidity” will focus on the borrowing requirements of both eurozone governments and banks. And, the analysis of “monetary flexibility” will focus on monetary policy settings to address the economic and financial stresses the countries in the eurozone are increasingly facing, it says.

S&P expects to conclude its review of eurozone sovereign ratings as soon as possible following the EU summit scheduled for Dec. 8 and 9. It suggests that ratings could be lowered by up to one notch for Austria, Belgium, Finland, Germany, Netherlands, and Luxembourg, and by up to two notches for the other governments.