Political uncertainty, a challenging fiscal outlook, and the rising divergence in funding conditions between France and other core euro area sovereign borrowers underscore the importance for political stability and reform efforts to reduce the deficit.

Scope Ratings has updated its GRE Rating Methodology following the call for comments period, which concluded on 29 July 2024. The methodology changes are not expected to impact any current ratings.

Electoral success of populist far-right and far-left parties in Thuringia and Saxony highlights Germany’s fragmenting political landscape as mainstream parties lose ground. Looming policy uncertainty could delay regional budgets and slow economic growth.

Spain's GDP growth is outpacing the euro area, but expenditure pressures continue to challenge public finances, demanding comprehensive reforms on regional financing to ensure long-term sustainability.

EU policymakers remain steadfast in their conviction that deploying bank and institutional capital and retail savings through frictionless banking and capital markets union will create economic security. An EU MidCap Bond market should be a priority.

The UK higher education system enjoys a strong reputation globally but increasing pressure on the sector’s funding model has rendered the financial viability of some universities uncertain.

Germany’s Länder are likely to borrow around EUR 10bn more than originally planned this year as they face weak domestic economic growth and federal budgetary constraints.

The proportion of Italian sovereign debt held by foreign investors, a potentially less stable source of demand than the ECB and residents, is rising and will make Italy more susceptible to changes in market sentiment in coming years.

The German government is maximising the modest leeway it has under the so-called debt brake to inject public funds into the economy, but the measures are insufficient for addressing the country’s large and widening investment gap.

Egypt’s public finances remain vulnerable to external shocks given the government’s limited fiscal space though external support, increased foreign direct investment and progress on reforms are improving resilience.