Sovereign & Supranational

Highlights

• 20 May 2013
  • Italy's Stronger Budgetary Performance Still Justifies Higher Rating Than Spain
    In our view, Spain has advanced further in correcting the loss in its external competitiveness and - given the more favourable political constellation than in Italy - the Spanish authorities should also be able to implement further structural reforms more easily than in Italy. Consequently, our base-case scenario anticipates a somewhat stronger growth recovery over the medium term in Spain than in Italy... Full Report​​
  • New budget projections are credit positive for US
    The non-partisan US Congressional Budget Office’s updated outlook for the US shows an improvement in government debt-to-GDP trends, assuming no additional policy measures. Despite the still subdued economic performance, the growth outlook appears to be more supportive of fiscal consolidation. Successful budget negotiations would contribute to further downward revisions to the debt trajectory, but their outcome remains uncertain... Full Report​​
• 15 May 2013
  • Luxembourg’s credit risks from oversized financial sector remain contained
    Although the risks to Luxembourg stemming from its oversized financial sector have increased since the beginning of the euro area crisis, we continue to assess these risks as “low” because we believe that the government’s balance sheet is not susceptible to the same level of deterioration that other European countries with large banking systems have experienced during the crisis. Nonetheless, the risk of a systemic shock in Luxembourg’s financial industry damaging economic growth and thereby undermining the government’s balance sheet remains the main risk facing this small country... Full Report