Moody's urges Turks to act swiftly on U.S. troop deal

Tue March 11, 2003 10:46 AM ET

ISTANBUL, March 11 (Reuters) - International ratings agency Moody's said on Tuesday

Ankara should act quickly to approve the arrival of U.S. troops in Turkey or it risked

forfeiting an aid deal that may stabilise the country's ratings outlook.

The agency said a war in Iraq could spark moves to downgrade Turkey's credit rating if

the country's debt situation worsened. Turkey says the U.S. has offered up to $30 billion

in grants and loan guarantees if parliament approves the troops' deployment.

"It's going to be too late if they wait...I'm afraid the money would be off the table if they

wait another week or so," Moody's analyst Kristin Lindow told Reuters by telephone.

"If the situation deteriorates for their debt costs then we would perhaps initiate a review

for a downgrade."

The agency said it suspected Ankara did not currently have sufficient financial incentive

to stick to its IMF-backed economic programme, secured after financial crisis ripped

though Turkey's economy in February 2001.

http://reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=2361587



Israel is an A2 Country Moody's Investors Service, the respected provider of credit ratings

and credit-related research in the global financial markets, has this month reaffirmed

Israel’s credit rating of A2 and given the state a stable outlook assessment. This despite

the ongoing PLO war and the threat of regional developments detrimental to Israeli

security. The recent Atid-EDI business report quoted Moody's Vice President Jonathan

Schiffer, author of the report, as saying, "The aggravated geopolitical variable is already

factored into the ratings, which otherwise would be much higher."

The Moody's report stated that the outlooks for all Israeli ratings are stable. The current

regional military balance and the strong external financial support that would be available

in a crisis from the Jewish Diaspora and from the US government are factors offsetting

the possible instability of the local security situation. Another important factor cited by

Moody’s and reported by Atid-EDI is the willingness of the Israeli government to cut

expenditures and fight budget deficits, in an effort to maintain economic stability. In

particular, Moody’s noted the positive free market developments of the second half of the

1990s, which expanded competition into various public sectors, increased privatization

and increased fiscal responsibility.

http://www.israelnationalnews.com/news.php3?id=40413