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S&P May Reassess Portugal, Greece Ratings When ESM Details Known

Standard & Poor’s may “reassess” the sovereign debt ratings of Greece and Portugal when full details of the planned European Stability Mechanism emerge, said Moritz Kraemer, managing director of European sovereign ratings at the company.

If S&P’s concerns are confirmed, “we would reassess the ratings specifically of Greece and Portugal which we think are the most likely potential customers of the ESM,” Kraemer said in an interview with Erik Schatzker on Bloomberg Television’s “Inside Track” in New York today.

As speculation mounted that Portugal will be the next victim of Europe’s debt crisis, leaders bowed to German Chancellor Angela Merkel’s call to pare the fund’s paid-in capital as of 2013 to 16 billion euros ($23 billion), less than the 40 billion euros foreseen in a March 21 accord.

Kraemer signaled he’s less concerned about Spain needing a bailout any time soon.

“What we have seen in the last few weeks is that there is more differentiation in the market place,” he said. “A few months ago we would have talked about Spain in this context but the market seems to have taken the view that Spain is in a different category and not immediately threatened by the same challenges as Portugal.”

“That’s our view as well and that’s the why the rating for Spain remains significantly higher,” Kraemer said.

To contact the reporters on this story: Gabi Thesing in London at; Erik Schatzker in New York at

To contact the editor responsible for this story: Craig Stirling at

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