May 16, 2016 / 9:25 AM / 4 years ago

BRIEF-Fitch: 'Brexit' would increase downside risks to EU sovereigns

May 16 (Reuters) - Fitch:

* ‘Brexit’ would increase downside risks to EU sovereigns

* “We would not expect to take any immediate negative rating actions on other eu sovereigns if UK left”

* Negative actions would become more likely in medium term if economic impact were severe or significant political risks materialised

* EU countries could gain from shift of some FDI from UK to EU

* Brexit could precipitate scotland leaving UK, which might intensify secessionist pressures in other parts of EU, such as Catalonia in Spain

* Brexit could boost anti-EU, other populist political parties, make EU leaders reluctant to implement unpopular policies with long-term economic benefits

* Fears of other countries leaving could widen bond spreads for “peripheral” countries, potentially increasing average cost of debt Source text for Eikon:

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