Sovereign Risk Ratings: Capital Shortage Poses Default Risks

Sovereigns in the Emerging Europe region are facing their greatest macroeconomic and financing challenges in over a decade. The risks to stability we highlighted in our last two Emerging Europe sovereign risk ratings (SRR) updates have played out dramatically in the third quarter, with the high risk economies we have long highlighted showing a particular deterioration. The core of the problem is not the level of the existing stock of public external debt, which we have stressed as being markedly low throughout the region. Nor is it a systemic problem with shifting political dynamics affecting the Willingness to Pay component

To read the full article, please choose one of the following options: