SandP lowers Belgium's outlook on political deadlock

14th December 2010, Comments 0 comments

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

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