Fitch Ratings revised on Friday the outlook on Greece’s long-term foreign and local currency Issuer Default Ratings (IDR) to Negative from Stable and affirmed the IDRs at ‘B’, according to an announcement of the credit rating company.

More specifically, the statement said that the issue ratings on Greece’s senior unsecured foreign and local currency bonds have been affirmed at ‘B’, the Short-term foreign currency IDR has been affirmed at ‘B’ and the Country Ceiling at ‘BB’.

With regard to the key rating drivers and the effect of the elections’ outcome on the country’s economy, Fitch Ratings stated the following:

The current period of political uncertainty has increased the risks to Greece’s creditworthiness as official financing, and any potential reopening of market access, could be delayed for some months. Early elections to be held on 25 January have made the direction of Greek policymaking more uncertain. Prolonged political deadlock until the summer is not Fitch’s expectation, but would increase the risk of financing difficulties and a return to recession.

In Fitch’s view, an agreement between a new Greek government and the Troika remains likely as there are strong incentives on both sides for a deal. This holds in the event of a Syriza victory in the election, which opinion polls suggest is the most probable outcome. Nevertheless, there is a wide gap between the policy proposals of both sides, such that negotiations would be complicated and subject to risks. Syriza has moderated its policy stance since 2012. It advocates remaining in the eurozone and has committed to maintaining a budgetary primary surplus and to honoring Greece’s obligations to IMF and private creditors. However, the privatization programme would most likely stall under a Syriza-led government and there would be upward pressure on the public sector wage bill.

Moreover, the announcement noted that “Fitch’s Banking System Indicator for Greece is ‘b’, indicating weak standalone creditworthiness,” and that “the banks are well capitalised but their asset quality is weak.”