Moody's sees significant downside risks for euro area

BRUSSELS Fri Nov 9, 2012 5:55am EST

BRUSSELS (Reuters) - Moody's still sees risks to the ratings of countries in the euro area, and highlighted that the key element for Spain's rating status is its access to markets, its managing director of EMEA sovereign ratings said on Friday.

"We continue to see significant downside risk for the euro area which explains the fact that out of 17 members ... we have a negative outlook on 15 - all but two members, those two being Finland and Estonia," Yves Lemay told Reuters on the sidelines of a bond conference in Brussels.

Moody's Investors Service affirmed Spain's investment-grade rating last month, easing widespread fears it could be downgraded to junk, but assigned it a negative outlook.

At the time, Moody's said a combination of euro area and European Central Bank support and the Spanish government's own efforts should allow the government to maintain capital market access at reasonable rates.

But Spain has yet to ask for aid - a pre-condition for ECB support. Asked whether the stalemate was increasing the downside risk for Spain's rating, Lemay said:

"Our main focus is about market access risk as opposed to how you manage (to) reduce that risk."

Lemay added that Moody's expects to express its view on France's rating in the coming weeks. It currently rates France Aaa, the highest credit rating, with a negative outlook.

(Reporting by Ana Nicolaci da Costa; Editing by Catherine Evans)