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TMCNet:  KBRA Releases Macro-Market Research: EU Cohesion Funding: Update on the Cuts

[July 10, 2018]

KBRA Releases Macro-Market Research: EU Cohesion Funding: Update on the Cuts

Kroll Bond Rating Agency (KBRA) releases a macro-market commentary: "EU Cohesion Funding: Update on the Cuts." KBRA's view on European sovereigns considers both prospective and actual financial support from the European Union (EU). As such, the European Commission's cohesion funding proposal for the 2021-2027 cycle that cuts financing by -17% is a notable development.

The new proposed cycle rebalances the transfer of funds towards countries whose per capita income growth has exhibited greatest weakness, including crisis economies. According to the proposal, only Greece, Cyprus, Belgium, and Bulgaria will receive larger nominal allocations. The scale of cuts reaches as high as -70.7%; although the largest cuts are for wealthier countries whose allocations are small relative to the sizes of their economies, and hence not highly impactful. The average reduction for the funding cycle is -22% and the proposed cuts for Poland of -15.5% result in an increase in that country's share of funding, albeit out of a smaller pool.

To access the full report, click here.

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About KBRA and KBRA Europe

Kroll Bond Rating Agency, Inc. is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, Kroll Bond Rating Agency, Inc. is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.


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