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Dublin: 20 °C Wednesday 12 August, 2020

More bad news for Belgium with credit rating downgrade

On top of its lack-of-a-government woes, Belgium’s credit rating has just been downgraded with a negative outlook…

Image: williamsdb via Creative Commons

CREDIT RATINGS AGENCY Standard & Poor’s has downgraded Belgium’s long-term AA+ rating to AA and says the outlook for the country’s creditworthiness is “negative”.

S&P cited the lack of a permanent government among its reasons for a downgrade; Belgium has been without a government now for a record 530 days.

Efforts to respond to potential financial emergencies are “in our opinion” constrained by the country’s lack of a government and the caretaker government lacks the mandate to implement serious economic reforms, S&P said in their statement this evening.

The agency also said that wider European financial woes could take a toll on Belgium’s exports, which account for over 80 per cent of the country’s GDP: “Belgium is one of the most open economies in the eurozone and is therefore in our opinion highly susceptible to any weakening of external demand.”

“In our opinion, protracted political uncertainty remains a risk to its creditworthiness,” it added.

Belgium’s caretaker prime minister Yves Leterme said today that “we really need strong signals now” from the parties negotiating a range of issues over next year’s budget, the AP reports. Talks reached a stalemate over how to tackle the country’s high debt and reduce its deficit.

Read more: Belgium: Things are getting worse by the minute >

Read: 526 days on and Belgium is still without a government >

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