October 2 (SeeNews) - Global rating agency Standard&Poor's (S&P) said on Friday that the break-up of the government coalition in Romania has no immediate impact on the country’s foreign currency BB+ and local currency BBB- ratings, both with negative outlook.
Despite a tense intra-coalition environment since the general elections in 2008, Romania’s government has so far successfully implemented the country's International Monetary Fund/EU-backed program, which is reflected in the completion of the first review and subsequent disbursements, the rating agency said in a statement.
"Following yesterday's departure of the Social Democrat Party (PSD) from the Democratic Liberal Party (DLP) led coalition, the latter may seek support among the current opposition parties or eventually call early elections," the statement said.
If the current situation leads to political gridlock, such that the government is prevented from carrying out its economic and fiscal consolidation program and public finances worsen, the sovereign credit ratings on Romania would come under further downward pressure, it added.
Another global rating agency, Fitch, said late on Thursday that following the collapse of Romania's coalition cabinet the potential for political uncertainty ahead of November's presidential elections is already factored into the country's sovereign ratings, but pressure for a downgrade could increase if authorities fail to meet policy commitments agreed with the IMF.