Credit rating agency Standard and Poor’s warned on Friday that European countries could face downgrades if their various eurosceptic parties that are currently gaining momentum win power.
Coming days before Greece holds cliffhanger elections where Europe’s austerity demands are the key issue, and before one in May in the UK where a referendum on leaving the EU is central to the debate, S&P said the drift in sentiment was a worry.
It said the parties that were potentially the most “credit negative” were Greece’s SYRIZA – which is leading the polls ahead of this weekend’s vote – and Spain’s Podemos, which also advocates raising public spending and restructuring debt.
“Eurosceptics are advocating a major macroeconomic policy shift,” S&P said.
“A decision by any government to default on debts or devalue the currency would, without question, represent a new policy direction.” [Reuters]