Montenegro's ratings supported by SAA

Montenegro's country ratings stand to benefit from the EU deal signed Monday, reports suggest.

Izvor: Thomson Financial, CNN

Thursday, 18.10.2007.

12:47

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Montenegro's country ratings stand to benefit from the EU deal signed Monday, reports suggest. Standard & Poor's Ratings Services said the European Union's decision to sign the Stabilization and Association Agreement (SAA) regarding the potential integration of the Republic of Montenegro into the EU supports the sovereign rating of the nation. Montenegro's ratings supported by SAA S&P has 'BB+' and 'B' ratings on the country which have incorporated the SAA between the EU and Montenegro. The outlook on the ratings is stable. S&P also said the ratings on Montenegro are constrained by external imbalances and the government's short track record in dealing with economic stress that may emerge from external shocks particularly through downturns in the tourism and aluminum sectors. The rating agency said the prospect of EU membership will remain a key driver for further economic and political stabilization of Montenegro, while the SAA will initially help lock in structural reforms and boost investors' confidence. It said further reforms, strong foreign inflows and readjustment in external imbalances will be crucial for the rating trajectory.

Montenegro's ratings supported by SAA

S&P has 'BB+' and 'B' ratings on the country which have incorporated the SAA between the EU and Montenegro. The outlook on the ratings is stable.

S&P also said the ratings on Montenegro are constrained by external imbalances and the government's short track record in dealing with economic stress that may emerge from external shocks particularly through downturns in the tourism and aluminum sectors.

The rating agency said the prospect of EU membership will remain a key driver for further economic and political stabilization of Montenegro, while the SAA will initially help lock in structural reforms and boost investors' confidence.

It said further reforms, strong foreign inflows and readjustment in external imbalances will be crucial for the rating trajectory.

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