Moody's boosts outlook for Netherlands, Belgium

Moody's raised its credit outlook for the Netherlands and Belgium on Friday, elevating both to stable from negative as the eurozone economy improves. The Netherlands kept its top-level Aaa rating, while Belgium was three levels down at Aa3. Moody's said the Netherlands outlook improved because it was less likely to be called on to help fund rescues of weaker eurozone countries, including troubled Italy and Spain. It also said there were signs that the country's own domestic problems, such as weak growth and high household debt, have peaked "and are likely to evolve in a positive direction." In addition, Moody's said, the country's fiscal situation has stabilized. "Although the politics of negotiating fiscal consolidation have recently been somewhat more challenging in the Netherlands, this has not prevented the country from implementing significant fiscal consolidation." For Belgium, Moody's said the risk that the government would have to shoulder more liabilities in the weak banking sector had declined. Bank asset quality "should improve going forward as the Belgian economy is expected to recover, especially in light of the banks' strong re-focus on the domestic market." Moody's also forecast that the government's fiscal consolidation will continue and that the ratio of government debt to GDP would peak this year or next at 100 percent and then slowly fall.