Standard & Poor’s revised its outlook on Romania down to stable from positive on Thursday, citing increasing political uncertainty since the country joined the European Union in January.
“The outlook revision reflects the protracted lack of political visibility since the beginning of 2007,” said Remy Salters, credit analyst at Standard & Poor’s.
“This comes at a time when policy challenges remain significant, both in relation to the structural reforms required to make the most of E.U. membership, and to the containment of growing demand-driven external imbalances.”
The ratings agency affirmed Romania’s BBB-/A-3 foreign currency and BBB/A-3 local currency sovereign credit ratings.
Romania was allowed into the European Union on Jan. 1 on the condition that it steps up efforts to fight corruption, reform the judiciary and improve administrative capacity.
The long-standing feud between the prime minister and the president has crippled Romania’s political process. Prime Minister Calin Tariceanu proposed a new minority cabinet Monday, a day after he scrapped the party of rival President Traian Basescu from the governing coalition.