S&P cuts EU home Brussels' credit rating

1st June 2010, Comments 0 comments

Rating agency Standard & Poor's on Tuesday cut its outlook on Belgium's Brussels capital region, home of the European Union, because of the desperate state of its finances.

With federal negotiations on re-financing suspended due to the collapse of the Belgian government, S&P said Brussels' could have to wait longer to receive less.

It warned that Brussels' budgetary performance and debt positions were "deteriorating" and accordingly was "revising our outlook... to negative from stable.

"The revision reflects likely changes to the size and timing of the region's refinancing package," S&P credit analyst Bertrand de Dianous said in a statement.

S&P said it did not now expect to see a settlement until 2011 and that it would likely provide less than the 500 million euros (610 million dollars) extra per year that SP had been anticipating before the government's April collapse.

S&P said Belgium's current institutional framework and political tensions were hurting the region's "capacity to benefit from economic buoyancy."

The Brussels capital region is home to around one million people, including a vast army of European Union bureaucrats, and is currently ranked in the top three EU administrative regions for per capita income, alongside the City of London and Luxembourg.

© 2010 AFP

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