Denmark among the 12 countries with the best credit ratings as Finland hit by Euro crisis but still leans on AAAMonday, 16 January 2012
Only 12 countries receive the coveted AAA-rating by rating agencies, and Denmark is one of them.
The grade given by the three leading rating agencies Standard & Poor's, Moody's and Fitch, and which recently led to the of the credit rating of countries such as France and Austria show the Scandinavian countries enjoy impressive credit rating.
For Denmark, it was feared that since the economy had been slipping where the housing sector has been facing crisis and its agricultural sector also limping, it was feared that the country’s credit level will be cautioned.
Instead it turns out that the Danish economy and public finances stand well and is facing an impressive rating levels.
“The country’s ratings has nothing to do with the feelings of the ordinary people but they affect ordinary people,” says Martin Lundholm, chief analyst at SparNord bank
“This is especially true for homeowners and businesses that have chosen an interest sensitive funding and therefore will profit from that foreign demand for Danish bonds, pushing interest rates down,” says Martin Lundholm.
Altogether, nine countries in the euro zone saw a downgrade last Friday by Standard & Poors, he believes that there is more to come.
Advertisement“The European economy is under pressure and this will inevitably put further pressure on an already pressured Danish economy, because about 70 percent of our exports go to our European neighbours,” he says.
“However we must admit that Denmark is now sitting on one of the outer seats in the exclusive club of AAA countries,” he says.
It is an advantage for Denmark to participate in the prestigious club - but it is now generally been a less dramatic event to lose its top rating.
“For example, investors have not turned their backs form the U.S.A just because they lost their top marks in the summer,” explains Martin Lundholm.
In related events, Standard & Poor's also affirmed Finland’s AAA rating for long-term and short-term credit. However, the outlook for the long-term rating is negative, according to Finland’s Ministry of Finance.
Finland’s rating suffers from insufficient policy initiatives of European political institutions. Standard & Poor's is critical of EU decision making and actions to solve the eurozone crisis.
The credit rating agency cites a competitive economy, the government’s responsible handling of the state economy and balanced public finances as Finland’s strengths. According to S&P, Finland’s actions have served to counterbalance weak European decision making.
By Scancomark.se Team
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The 12 countries with the top AAA rating
- United Kingdom