Higher geopolitical risk weakens European countries' credit: Moody's

By Ovunc Kutlu

ANKARA (AA) - Higher geopolitical risk due to Russia's war on Ukraine have weakened European countries' credit resilience, according to global rating agency Moody's.

The increase in political risk leaves credit ratings of most European countries less resilient to further geopolitical or economic shocks, the agency said in a statement on Wednesday.

"The increasing likelihood of a prolonged military conflict between Russia and Ukraine increases the risk of security and energy supply risks materializing for European sovereigns," it said.

Moody's noted that it has changed the political risk scores for 30 European countries due to the increase in geopolitical risk, adding that Ukraine and Belarus have the highest geopolitical risk scores.

While Moldova's high political risk score reflects the absence of NATO and EU security guarantees and proximity to the military conflict, political risk for the Baltics, Poland and Romania is higher than for most EU and NATO members due to their physical proximity and history of tense relations with Russia, according to the agency.

"Geopolitical risk for NATO members in Europe is now structurally higher regardless of geographic location or energy dependencies," the statement said.