Sovereign Risk Ratings - Tentative Improvement, But Risks Still Prevalent

BMI View: The outlook for sovereign risk across emerging Europe is positive through the medium term, with credit market stabilisation and an improvement in macroeconomic conditions in H209 likely to continue lifting 'ability to pay' indicators going forward. That said, we stress that the recovery process in the region will be weak and fragile, at least until late 2010. As such, systemic risks to sovereign stability cannot yet be wholly discounted, and this is reflected in the still very weak sovereign risk ratings we accord across central and Eastern Europe.

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