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BRUSSELS (AP) ― Belgium’s financial troubles appeared to mount Monday as Moody’s Investors Service announced it was putting the country’s three regions on review for a possible downgrade, along with three of their government-related issuers.
The news followed Friday’s announcement that Moody’s was putting the country’s “Aa1” ratings on review for possible downgrade, in part because the country was about to pay a significant sum to prop up the French-Belgian Dexia bank.
Over the weekend, Belgium agreed to buy the bank’s Belgian subsidiary for $4 billion ($5.4 billion) as part of a restructuring of the lender amid a liquidity squeeze.
Moody’s said late Monday it was placing the regions and the government-related issuers on review in part because of their possible exposure to losses stemming from the Dexia restructuring.
The country’s three regions are the Dutch-speaking Flemish region, the French-speaking Walloon region, and the bilingual Brussels-capital region.
Beyond the crisis over Dexia bank, Belgium also worries investors because for more than a year its feuding regions have been unable to agree on a governing coalition able to make long-term financial decisions.
Belgium has been ruled in the meantime by a caretaker government. However, in the past few weeks, negotiators have appeared to be edging closer to forming a long-term governing coalition.
Moody’s said the review for possible downgrade of the government issuers ― Aquafin NV, Societe Publique de Gestion de l’Eau and Fiwapac ― reflected their strong links with their sponsoring governments, namely, the regions of Flanders and Wallonia.
Moody’s defines a government-related issuer as “an entity with full or partial government ownership or control, a special charter, or a public policy mandate from the national or local government.”
The news followed Friday’s announcement that Moody’s was putting the country’s “Aa1” ratings on review for possible downgrade, in part because the country was about to pay a significant sum to prop up the French-Belgian Dexia bank.
Over the weekend, Belgium agreed to buy the bank’s Belgian subsidiary for $4 billion ($5.4 billion) as part of a restructuring of the lender amid a liquidity squeeze.
Moody’s said late Monday it was placing the regions and the government-related issuers on review in part because of their possible exposure to losses stemming from the Dexia restructuring.
The country’s three regions are the Dutch-speaking Flemish region, the French-speaking Walloon region, and the bilingual Brussels-capital region.
Beyond the crisis over Dexia bank, Belgium also worries investors because for more than a year its feuding regions have been unable to agree on a governing coalition able to make long-term financial decisions.
Belgium has been ruled in the meantime by a caretaker government. However, in the past few weeks, negotiators have appeared to be edging closer to forming a long-term governing coalition.
Moody’s said the review for possible downgrade of the government issuers ― Aquafin NV, Societe Publique de Gestion de l’Eau and Fiwapac ― reflected their strong links with their sponsoring governments, namely, the regions of Flanders and Wallonia.
Moody’s defines a government-related issuer as “an entity with full or partial government ownership or control, a special charter, or a public policy mandate from the national or local government.”
