Shouldering the burden of spending to limit the damage inflicted by the coronavirus outbreak could put Germany’s triple-A credit rating at risk, writes Dhara Ranasinghe for Reuters, citing research from Credit Benchmark.
The research suggests that the United States and Italy could also both be at risk of credit deterioration as a result of the large stimulus packages pledged to mitigate economic damage from the virus.
“Germany’s massive stimulus package means that it needs to suspend its adherence to its self-imposed balanced budget rule, and the underlying probability of default at 1.24 basis points, puts it very close to being downgraded …”, said David Carruthers, head of research at Credit Benchmark in London.
Reuters, March 27, 2020.
