Tue, 08 Mar 2005
From: AFP

Reform of stability pact could hurt eurozone ratings: S&P

Agence France-Presse, Frankfurt

The international credit rating agency Standard and Poor's said on Monday that a softening of the EU's budget rules could undermine the sovereign debt ratings of some eurozone member states.

"The apparent weakness of political will among existing eurozone members to consistently pursue policies that enhance fiscal flexibility acts as a constraint on sovereign credit ratings," S and P said in a special report on the proposed reform of the EU Stability and Growth Pact set to be discussed by EU finance ministers this week.

S and P's decision last year to downgrade its debt ratings for Italy and Greece and to revise its outlook for Portugal was the result of a lack of action by these countries to improve their fiscal balances and cut debt, the agency said.

"This necessary commitment will certainly not be encouraged by any reform of the Stability and Growth Pact that signifies greater tolerance of fiscal policy slippage whenever public finances come under pressure," it said.

A weakening of the pact could therefore have a direct impact on ratings, S and P warned.

"Shorn of the reassurance offered by a well-enforced Stability and Growth Pact, we would possibly need to take an increasingly cautious view on the likelihood of eurozone members adhering to stated medium-term fiscal targets and reform strategies," the report said.

And a dilution of the pact could also affect interest rates, S and P added.

"It is also important to remember that the European Central Bank has been a consistent opponent of changing the pact. Consequently, it would quite probably respond to any perceived loosening of the fiscal rules through an offsetting tightening of monetary policy," the agency said.

S and P argued that countries' difficulties in respecting the pact's rules were not the result of the way the rules were designed but of a lack of political determination.

"The current rules themselves are not the core of the problem, but rather the lack of political will to apply them," it said.

The pact has actually played a very positive role in bringing about healthier public finances across Europe over the past decade, it added.

Investment bank Morgan Stanley, in its Global Economics publication in January, also warned about the dangers of a lack of credibility in the Stability and Growth Pact.

it argued that the "non-bailout clause in the Maastricht Treaty" should be reaffirmed as binding and that "the ECB should start to discriminate between issuers based on credit ratings when accepting collateral at the weekly refinancing operations".





News Search/Filter
Transaction Rates
10 Dec 18
Buy
Sell
AED1
3,945.27
3,945.27
AFN1
191.01
191.01
ALL1
133.25
133.25
AMD1
29.86
29.86
ANG1
8,164.82
8,164.82
AOA1
46.82
46.82
ARS1
388.05
388.05
AUD1
10,405.53
10,405.53
AWG1
8,050.55
8,050.55
AZN1
8,511.57
8,511.57
BAM1
8,431.27
8,431.27
BBD1
7,245.48
7,245.48
BDT1
173.05
173.05
BGN1
8,452.70
8,452.70
BHD1
38,436.54
38,436.54
BIF1
8.11
8.11
BMD1
14,490.96
14,490.96
BND1
9,195.00
9,195.00
BOB1
2,096.99
2,096.99
BRL1
3,708.22
3,708.22
BSD1
14,490.96
14,490.96
BTC1
51,341,397
51,341,397
BTN1
204.70
204.70
BWP1
1,360.84
1,360.84
BYN1
6,796.56
6,796.56
BZD1
7,188.51
7,188.51
CAD1
10,871.18
10,871.18
CDF1
8.90
8.90
CHF1
14,638.39
14,638.39
CLF1
598,453.78
598,453.78
CLP1
21.47
21.47
CNH1
2,099.64
2,099.64
CNY1
2,107.56
2,107.56
COP1
4.55
4.55
CRC1
24.21
24.21
CUC1
14,490.96
14,490.96
CUP1
562.75
562.75
CVE1
149.12
149.12
CZK1
638.47
638.47
DJF1
81.40
81.40
DKK1
2,212.98
2,212.98
DOP1
288.12
288.12
DZD1
122.24
122.24
EGP1
810.00
810.00
ERN1
966.62
966.62
ETB1
516.66
516.66
EUR1
16,519.29
16,519.29
FJD1
6,857.47
6,857.47
FKP1
18,431.57
18,431.57
GBP1
18,431.57
18,431.57
GEL1
5,472.02
5,472.02
GGP1
18,431.57
18,431.57
GHS1
2,903.91
2,903.91
GIP1
18,431.57
18,431.57
GMD1
292.45
292.45
GNF1
1.59
1.59
GTQ1
1,875.48
1,875.48
GYD1
69.10
69.10
HKD1
1,853.93
1,853.93
HNL1
593.77
593.77
HRK1
2,234.87
2,234.87
HTG1
192.66
192.66
HUF1
51.10
51.10
IDR1
1.00
1.00
ILS1
3,882.34
3,882.34
IMP1
18,431.57
18,431.57
INR1
203.02
203.02
IQD1
12.17
12.17
IRR1
0.34
0.34
ISK1
119.01
119.01
JEP1
18,431.57
18,431.57
JMD1
114.06
114.06
JOD1
20,421.16
20,421.16
JPY1
128.79
128.79
KES1
141.47
141.47
KGS1
210.90
210.90
KHR1
3.60
3.60
KMF1
33.58
33.58
KPW1
16.10
16.10
KRW1
12.89
12.89
KWD1
47,664.02
47,664.02
KYD1
17,392.14
17,392.14
KZT1
39.09
39.09
LAK1
1.69
1.69
LBP1
9.60
9.60
LKR1
81.17
81.17
LRD1
91.68
91.68
LSL1
1,022.65
1,022.65
LYD1
10,375.47
10,375.47
MAD1
1,528.63
1,528.63
MDL1
841.22
841.22
MGA1
4.06
4.06
MKD1
268.19
268.19
MMK1
9.28
9.28
MNT1
5.90
5.90
MOP1
1,800.00
1,800.00
MRO1
40.59
40.59
MRU1
397.01
397.01
MUR1
421.25
421.25
MVR1
937.92
937.92
MWK1
19.60
19.60
MXN1
714.22
714.22
MYR1
3,477.97
3,477.97
MZN1
239.32
239.32
NAD1
1,022.65
1,022.65
NGN1
39.75
39.75
NIO1
447.04
447.04
NOK1
1,704.59
1,704.59
NPR1
127.93
127.93
NZD1
9,914.71
9,914.71
OMR1
37,644.23
37,644.23
PAB1
14,490.96
14,490.96
PEN1
4,303.81
4,303.81
PGK1
4,301.65
4,301.65
PHP1
274.86
274.86
PKR1
104.30
104.30
PLN1
3,848.72
3,848.72
PYG1
2.45
2.45
QAR1
3,979.94
3,979.94
RON1
3,553.10
3,553.10
RSD1
139.56
139.56
RUB1
218.11
218.11
RWF1
16.25
16.25
SAR1
3,862.40
3,862.40
SBD1
1,823.83
1,823.83
SCR1
1,062.82
1,062.82
SDG1
304.37
304.37
SEK1
1,602.73
1,602.73
SGD1
10,566.56
10,566.56
SHP1
18,431.57
18,431.57
SLL1
1.72
1.72
SOS1
25.05
25.05
SRD1
1,943.00
1,943.00
SSP1
111.24
111.24
STD1
0.68
0.68
STN1
673.99
673.99
SVC1
1,655.92
1,655.92
SYP1
28.15
28.15
SZL1
1,022.65
1,022.65
THB1
441.39
441.39
TJS1
1,537.35
1,537.35
TMT1
4,128.52
4,128.52
TND1
4,899.73
4,899.73
TOP1
6,326.47
6,326.47
TRY1
2,722.18
2,722.18
TTD1
2,149.85
2,149.85
TWD1
468.43
468.43
TZS1
6.30
6.30
UAH1
520.80
520.80
UGX1
3.87
3.87
USD1
14,490.96
14,490.96
UYU1
451.83
451.83
UZS1
1.74
1.74
VEF1
0.05
0.05
VND1
0.62
0.62
VUV1
131.01
131.01
WST1
5,557.92
5,557.92
XAF1
25.18
25.18
XAG1
211,705.28
211,705.28
XAU1
18,100,350.99
18,100,350.99
XCD1
5,361.95
5,361.95
XDR1
20,162.54
20,162.54
XOF1
25.18
25.18
XPD1
17,707,317.07
17,707,317.07
XPF1
138.43
138.43
XPT1
11,483,991.63
11,483,991.63
YER1
57.88
57.88
ZAR1
1,020.74
1,020.74
ZMW1
1,219.18
1,219.18
ZWL1
44.95
44.95
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services