Bloomberg News

Italy Seen Riskier Than Hungary, Ireland in BlackRock Index

June 29, 2011

(Updates with Greek parliament vote in third paragraph.)

June 29 (Bloomberg) -- Italy ranked worse than Hungary and Ireland in a new index from New York-based money manager BlackRock Inc. that gauges the risk of sovereign defaults.

Greece and Portugal, whose debt levels were called “unsustainable” by BlackRock, came in last among 44 countries, the company said in a study published yesterday. The BlackRock Sovereign Risk Index ranks debt issuers on the likelihood of default, devaluation or above-trend inflation.

Greek lawmakers approved today the first part of an austerity package crucial for securing international aid and avoiding the euro-area’s first sovereign default. The vote came amid a 48-hour strike and scuffles outside parliament that saw police fire tear gas at crowds of protesters that swelled to more than 20,000.

Italy’s net debt is higher than that of Ireland and Hungary as a percentage of gross domestic product, according to data compiled by Bloomberg. Italy’s debt, which exceeds GDP, “is extremely high for a country with its fundamentals and term structure,” BlackRock said in the report. The government must roll over debt equal to 43 percent of GDP in the next two years, it said.

The U.S. ranked 15th in the BlackRock index, just below China. Norway, Sweden and Switzerland were judged the safest issuers. Rated lowest after Greece and Portugal were Venezuela, Egypt, Italy, Hungary, Ireland, Argentina, Spain and Turkey.

BlackRock, which manages $3.65 trillion in assets, is the world’s largest money manager.

--Editors: Larry Edelman, Christian Baumgaertel

To contact the reporter on this story: Christopher Condon in Boston at ccondon4@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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