Moody’s “waiting until next government” to release Portugal from “rubbish” status

Moody’s ratings agency has made a surprise upgrade on Portugal’s sovereign rating – bringing it one step from exiting its long-held “rubbish” status.
The move suggests fears that the ongoing BES scandal will have a serious impact on the government’s balance sheet are calming.
Nonetheless, the financial press is sounding a warning: “Don’t expect to see the rating upgraded any further any time soon.”
Negócios online explains: “Moody’s is waiting for ‘greater visibility’ on what the next government will do in terms of budgetary consolidation.”
What would effectively be the “third upgrade from Moody’s” when it comes “will certainly take more time”, says the financial website – and experts will have to be assured that public debt levels are falling.
For now, the rating has been upgraded one notch to Ba1 – which brings it within sight of what economists call “investment grade level”.
Moody’s had not been expected to upgrade Portugal’s rating before September 5.
The decision to pre-empt this date may have something to do with calming nerves in the wake of the BES scandal.
Moody’s official line, as explained by Danske Bank, was that the conclusion of its latest review “necessitates this rating action being released on a date not listed for this entity”.