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S&P downgrades Polish rating

PR dla Zagranicy
Roberto Galea 16.01.2016 11:03
A firm warning has been given to the Polish government by Standard & Poor’s, which has cut the country’s rating and warned of a further downgrade.
Photo: cc/Flickr.com/Fox WuPhoto: cc/Flickr.com/Fox Wu

Standard & Poor's has lowered Poland's long-term foreign credit rating to BBB+ from A-, the agency said in a statement released Friday.

“The downgrade reflects our view that Poland’s system of institutional checks and balances has been eroded significantly as the independence and effectiveness of key institutions, such as the constitutional court and public broadcasting, is being weakened by various legislative measures initiated since the October 2015 election,” Standard & Poor’s said in the statement.

“The change in the rating outlook to negative reflects our view that there is potential for further erosion of the independence, credibility, and effectiveness of key institutions, especially the National Bank of Poland (NBP),” the statement read.

The Polish złoty currency dropped over two percent to PLN 4.48 against the euro following the news.

Economist Lars Christensen tweeted that the decision was a “shocker” and “a bit too aggressive”, while other experts, including Marcin Piątkowski, a senior economist at the World Bank called S&P's decision “absurdly premature and abrupt”.

The Polish Finance Ministry called the decision by the rating agency “incomprehensible”.

“The decision of the rating agency Standard and Poor's about lowering credit rating of Poland is incomprehensible from economic and financial analysis point of view,” the ministry wrote in a statement.

“This decision is contradictory to assessments presented by other rating agencies, the biggest international financial institutions and financial market participants. The decision is all the more incomprehensible as it was not preceded by changes of rating outlook, which was positive prior to that decision. In MoF's opinion attitude of the agency to the dialogue with the Polish authorities about doubts raised by the agency over the so-called political climate is disappointing.”

The euro-sceptic Law and Justice (PiS) party won a landslide victory over the former ruling centre-right party, Civic Platform (PO), in October 2015 elections causing extensive changes in legislation and management of state-run companies. (ua/rg)

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