Moody’s warns the Netherlands on it credit rating

The fall of the government and the failure to agree an austerity programme can have a negative affect on the Netherlands’ credit rating, credit ratings agency Moody’s said on Tuesday morning.

‘Despite its tradition of budgetary discipline, this development creates uncertainty about the future direction of the country,’ Moody’s said in its report, according to press coverage.
If the Netherlands does not get a grip on its budget, this will create pressure on its triple-A credit rating, the agency warns. Failure could also have a negative effect on the rest of the eurozone and hinder the introduction of stricter budgetary rules.
Moody’s expects the caretaker VVD-CDA government and opposition parties to adopt some of the measures contained in the aborted austerity package. However, it does recognise that implementing the full &euro14bn package will take some time after any new elections.
The agency does say the Netherlands has a ‘very robust system’ and a good track record on budgetary discipline, but warns these must be kept in tact if the country is to retain its present credit rating.

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