Standard & Poor΄s Ratings Services said it keeps Greece and Portugal on watch for possible credit downgrades, underscoring the continuing difficulties facing fiscally strapped governments in the European debt crisis.
Regarding Greece, it remains “uncertain about the ultimate nature, and impact, of the proposed key features of the European Stability Mechanism”, said S&P in a press release.
S&P said that it would be unlikely to cut the debt ratings of Greece and Portugal by more than two notches. It downgraded Portugal΄s long-term debt to A- in November and has had Greece on a BB+ rating since December.
“We expect that by late March 2011, European policymakers will have decided on the key features of the ESM and we expect the ESM will be operational by mid-2013”, noted Standard & Poor΄s credit analyst Marko Mrsnik.
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