NEW YORK Feb 26 Ratings agency Standard &
Poor's said on Tuesday that Italy's recent election would not
immediately affect the country's sovereign rating but could in
the future, leaving the euro zone's third biggest economy at
investment grade for now.
Italy's political parties are still looking for a way
forward after the weekend election gave no party a parliamentary
majority, posing the threat of prolonged uncertainty stoking the
European financial crisis.
"We believe the policy choices of the next government, once
it is mandated by Italian President Giorgio Napolitano, will be
a key factor for Italy's sovereign creditworthiness," S&P said
in a statement.
The election results have brought back uncomfortable
memories of 2011 and 2012, when Italian borrowing costs came
close to being unsustainable and the euro zone teetered on the
brink of collapse.
But S&P said that it still believes Italy will continue with
fiscal consolidation, although worries remain that a new
government might not be seen as having a strong enough mandate
to push through other structural reforms to boost the economy.
The agency rates Italy BBB-plus. Fitch rates the country
A-minus, and Moody's Investors Service rates Italy Baa2. All
those ratings carry negative outlooks.