LISBON Feb 7 The risk of fragmentation of the
European Union remains low for now but political risks are on
the rise and forthcoming elections in various countries are
likely to paralyse policy decisions, Moody's ratings agency said
Dietmar Hornung, Associate Managing Director for Sovereign
Risk told a conference in Lisbon that "something is emerging
that needs attention" and Moody's has shifted its assessment of
political risk to "low" from "very low".
Still, he saw no return of the euro zone debt crisis.
"The EU is in a post-crisis steady state... overall it's
rather stable and balanced... EU fragmentation risk remains
low," he said.
With elections due this year in core euro zone countries
such as Germany and France, he said: "We're not really concerned
about Germany, but we have to watch France and Italy... In
France, there's a lot of uncertainty."
Moody's also said that some uncertainties have diminished
since Britain's vote to leave the EU last year and the British
economy was holding up well, even as the exit was seen as
negative for the British economy in the longer run.
(Reporting By Andrei Khalip and sergio Goncalves, editing by