Moody's revises Luxembourg outlook to stable from negative; affirms AAA sovereign rating
- The key drivers of today's outlook change are as follows:
(1) Moody's believes there is now a lower likelihood that Luxembourg's government balance sheet will need to contribute to further collective support to non-core euro area countries, and in particular to Italy or Spain. Furthermore, Moody's believes that Luxembourg's exposure to contagion risks within the wider euro area has reduced.
(2) The Luxembourg economy is steadily recovering, with the financial services industry providing a notable contribution.
- Moody's affirmed Luxembourg's Aaa rating due to:
(1) The continued soundness of public finances, as reflected in low debt metrics and high financial flexibility.
(2) Moody's expectation that medium to-long-term challenges in the economic and public finance sphere will continue to be proactively addressed by the authorities.