Slovenia, the first post-communist nation to adopt the euro, said a reduction of its credit rating by Standard & Poor’s was “excessive” as the country faces rising debt and a political vacuum.
The Balkan nation was lowered one level to A+ with a negative outlook after S&P deemed a European Union summit on Dec. 9 to be “no breakthrough,” Moritz Kraemer, managing director of European sovereign ratings at the company, said today on a conference call. S&P also downgraded eight other euro-zone nations including France, which lost its AAA rating.
The cut “is excessive and doesn’t take into account measures on the level of European Union as well as in Slovenia,” the Finance Ministry in Ljubljana said in an e-mailed statement today.
EU nations pledged last month to enforce stricter fiscal rules to lower debt and stem the euro-region sovereign-debt crisis that started in Greece more than two years ago. Slovenia began using the single European currency in 2007.
The country has been without an official government since September, when Borut Pahor was toppled as prime minister in a no-confidence vote. Zoran Jankovic, who won an election last month, failed on Jan. 11 to draw enough support from legislators for approval to succeed Pahor.
Slovenia needs to cut public spending to comply with a new fiscal pact being pushed by German Chancellor Angela Merkel and French President Nicolas Sarkozy.
Moody’s Investors Service lowered its assessment of the former Yugoslav nation’s creditworthiness by one step to A1 on Dec. 22. Moody’s cited a risk that government finances may be further strained by a possible need to provide funding to the banking industry.