Eurozone Headwinds Threaten Recovery

Emerging Europe's Sovereign Risk Ratings saw only a modest uptick this quarter, as growing concerns surrounding a possible slowdown in H210 and 2011 weigh on the region's aggregate 'ability to pay' scores. Given the renewed focus on public finances concomitant with the unfolding debt crisis across the eurozone's southern periphery, we stress that a state's ability to pass unpopular fiscal austerity measures over the coming quarters (represented in the 'willingness to pay' subcomponent of our methodology) will be a key determinant of underlying sovereign creditworthiness through end-year.

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