Credit quality in the European Union improved in the second quarter, but the outlook remains mixed at best, according to Standard & Poor's, the ratings agency.

S&P measures the region's credit quality using a ratio of downgrades per upgrade. The credit ratio fell to 3.4 from 20.5 in the first quarter, due to a combination of fewer downgrades and more upgrades. S&P reported 34 downgrades and 10 upgrades, compared with 41 and two, respectively, in the first quarter.