SandP lowers Belgium's outlook on political deadlock
Debt ratings agency Standard & Poor's lowered its outlook for Belgium from stable to negative on Tuesday, warning that the country's protracted government negotiations could hurt its credit standing.
S&P kept Belgium's long-term debt rating at AA plus and the short-term credit score at A-1 plus because of a better-than-anticipated fiscal standing for 2010.
But the ratings agency warned that it could cut the sovereign rating by one notch within six months if Belgium fails to form a government soon.
"We believe that Belgium's prolonged domestic political uncertainty poses risks to its government's credit standing, especially given the difficult market conditions many eurozone governments are facing," said S&P credit analyst Marko Mrsnik.
Belgium remains without a new government six months after June 13 elections because Flemish and French-speaking parties are deadlocked over giving greater fiscal autonomy to the country's regions.
© 2010 AFP