Moody’s, the rating agency, downgraded Portugal by two notches on Tuesday, citing the country’s deteriorating public finances.
The US rating agency cut Portugal’s long-term credit rating to A1 from Aa2 on concerns over its debt to gross domestic product and debt to revenue ratios, which have risen rapidly over the past two years.
The Eurozone is no where near out ofthe woods yet. Which should no doubt concentrate t he minds of those chaps meeting.
As Moodys themselves say,
Looking ahead, Moody’s expects the government’s debt metrics to continue to
deteriorate for at least another two to three years, with the debt-to-GDP and
debt-to-revenues ratios eventually approaching 90% and 210%, respectively,
before stabilizing once the budget has moved back into a primary surplus