26 Nov 2011

Belgium credit rating downgraded

10:19 am on 26 November 2011

Standard & Poor's has downgraded Belgium's credit rating over concerns about the country's world-record political impasse, debt level and slowing growth.

Ratings agencies have long warned Belgium that the political impasse, which has lasted 19 months, could impact the credit score of a country whose debt is nearly as big as its annual national output.

Caretaker Prime Minister Yves Leterme says the downgrade is "bad news."

He's urged bickering political parties to reach a deal on a budget this weekend to finally pave the way for the formation of a coalition government.

"The ability of authorities to respond to potential economic pressures from inside and outside of Belgium...in our opinion is constrained by the repeated failure of attempts to form a new government," S&P said in a statement.

The downgrade is more bad news for eurozone leaders scrambling to contain the relentless debt crisis.

Greece, Portugal and Ireland have already received bailouts in the past yea, and Italy and Spain are now in the firing line.