Developments in Ukraine amid possible shifts in US foreign, defence and energy policy will be pivotal in determining European supranationals’ strategies and disbursements next year.

Tuesday, 3 December 2024, 15:30 CET

The credit rating Outlooks for supranational institutions and multilateral development banks (MDBs) rated by Scope remain Stable, signalling that risks facing the high-rated issuers are balanced going into the new year despite geopolitical uncertainties.

As challenging as France’s fiscal and political outlooks are, the country’s underlying credit strengths include a favourable profile of government debt – for which there is ample investor appetite – a resilient economy and well-capitalised banks.

Germany needs a stable and reform-oriented government to respond to the impact of president-elect Donald Trump’s potential policy shifts that will impact Germany’s trade, fiscal and defence policies.

Donald Trump’s emphatic victory in the US presidential elections is net credit negative for the US in the medium term by raising financial risks although nearer-term implications for the economy are more mixed.

The UK budget sets an ambitious growth-oriented approach, but questions remain over its ability to meaningfully boost long-run economic growth. The easing of budgetary constraints and reduced monetary flexibility pose credit challenges.

Public finances in the US remain the main macro-economic challenge, which, in the context of the country’s flawed fiscal framework and political polarisation, will continue to deteriorate, but to different degrees depending on the election outcome.

The Positive Outlook on Greece’s BBB- ratings is underscored by falling public debt, a more resilient banking system, and structural reforms to tackle economic vulnerabilities. Our baseline is for primary budget surpluses to be sustained in coming years.

Georgia’s coming elections highlight its balancing act between managing ties with the West and a complex relationship with Russia. Competing visions for the nation’s future, challenging geopolitics and sanctions risks threaten the sovereign’s ratings.