View Full Version : Estonia Credit Rating Raised by Fitch on Euro Entry

07-19-2010, 03:31 PM
Estonia Credit Rating Raised by Fitch on Euro Entry (http://www.businessweek.com/news/2010-07-19/estonia-credit-rating-raised-by-fitch-on-euro-entry.html)

Fitch raised its long-term foreign and local currency ratings on Estonia to A, the fifth-highest investment grade, from BBB+ and A- respectively, according to a statement from the credit evaluator today. The outlook is stable, Fitch said.

“Joining the euro area improves Estonia’s risk profile as it reduces risks associated with the country’s sizeable external debt and foreign exchange lending in the domestic banking system, and gives its banks access to European Central Bank liquidity facilities,” said Douglas Renwick, Associate Director in Fitch’s Sovereigns group. “Estonia’s sound public finances and flexible economy make the country well-suited for a currency union.”

Estonia won European Commission backing on May 12 to join the euro area after outperforming the bloc’s existing 16 members on the Maastricht Treaty fiscal criteria. The Baltic nation had a budget deficit of 1.7 percent of gross domestic product last year and a debt-to-GDP ratio of 7.2 percent, the lowest in the European Union, the commission said on May 5.