Credit rating agency Moody's raised Ireland's sovereign debt rating on Saturday, citing confidence in the eurozone member's ability to further cut its deficit after finally forming a government. Moody's, which pointed also to a strong economic recovery in Ireland, raised its key rating for the country's sovereign debt by one notch to A3 from Baa1, adding that the outlook on the long-term rating remains "positive".
It said in a statement that "while a UK exit from the EU would have negative repercussions on Ireland, given the close economic ties", it considers "that this risk would be manageable for the Irish economy". Ireland's close trading partner Britain votes in a referendum on June 23 to decide whether to remain part of the 28-nation European Union. Regarding Ireland, Moody's said that "the risk of a reversal of the fiscal consolidation seen over the past several years is low". It added: "The recent political agreement between the two largest parties in parliament and the recent election of a minority government led by Fine Gael, which has established a strong track record of fiscal management over the past several years, give comfort that the budget deficit will be reduced further in coming years." Ireland's parliament last week re-elected Enda Kenny as prime minister at the head of a minority government following a deal aimed at a slight easing of austerity.