S&P became the first of the big three ratings agencies to return Ireland to the ‘A’ category last week, but it remains several levels from the prized top notch.
Ireland lost its AAA ranking from S&P in 2009.
Kyran Curry, the agency’s sovereign ratings director, said it took seven years for Australia to regain its AAA rating. In Ireland’s case, he said it would be well beyond three years.
“The debt burden, it’s off the scale compared to other sovereigns that we follow,” Mr Curry said.
“This [return to AAA] is not something that happens overnight.”
S&P last week said it was raising its long-term sovereign credit rating for Ireland to A- from BBB+, with a positive outlook, meaning there’s a one in three chance of another upgrade in the next two years.
This came just weeks after Moody’s lifted the country’s rating by two notches in a better- than-expected assessment. The last time Ireland had an A rating was in April 2011, with S&P.
Mr Curry said it would be premature to have another upgrade in its December review.
Asked about the rise of anti-austerity political groupings in the recent election, Mr Curry said the agency believed that fiscal discipline is likely to remain, even if those same parties manage to get into government.
“This is not just Ireland, but those parties that are gaining more influence and they’re being heard more, we still believe at the moment that while they can throw stones, once they’re in a position of influence and power to do something about it, things might be slightly different,” he said.
“We see it as very unlikely that the path that Ireland’s been following over the course of the last three to four years would dramatically unwind.”
Nigel Greenwood, S&P’s financial institutions ratings director, said he did not believe the banks would fail European-wide stress tests later this year.
“It’s very clear that capital is a ratings weakness for Irish banks and if they want to improve their credit ratings they will need to improve capital,” he said.
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