Fitch Ratings announces the upgrade of ratings of countries in the eurozone, if they further reduce deficits and debt. The agency is, however, skeptical, about when it could be done, due to the weak economic recovery.
The agency proceeded with several upgrades of the eurozone member states last year, to the extent that the recession receded, according to Reuters. Among them, Greece’s rating was upgraded in May 2013.
According to Fitch, the countries more likely to have their creditworthiness upgrades are Ireland, Portugal and Spain. The fewest chances, Italy and Slovenia.
The main factor for a possible upgrade is considered by Fitch to be deficit reduction and stabilization and then the reduction of public debt. This may also be contributed by the ensuring of access to markets and structural changes.
The assessments, however, may remain unchanged or be reduced if growth is weak and the Debt/GDP ratio remains constant or continues to rise, the firm added.
According to its own historical data on how quickly the 10 countries that entered the crisis and were downgraded, regained a rating over “B”, Fitch concludes that:
-Countries suffered a degradation by 5.9 steps over two years and gained 4.1 levels over 5 years and 5.3 levels in 10 years.
Since 1970, there have been only nine cases where the reduction of public debt exceeded 20 percentage points over a period of eight years, amid economic growth, significantly stronger than what is expected in the eurozone today.
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