S&P: Serbia unchanged

Standard & Poor's said that the declaration of independence by Kosovo's authorities on Feb. 17, 2008, would not have any immediate impact on the sovereign credit ratings on the Republic of Serbia (BB-/stable/B).

However, S&P said it emphasized that the response of the Serbian government to the political pressures created by the declaration and to the process of E.U. integration will be of crucial importance for the sovereign ratings.

"We don't anticipate the declaration of independence, which is expected to be recognized by the U.S. and major EU countries early this week, to cause large-scale violence or political instability in Serbia," S&P credit analyst Sladana Tepic said.

"It does, however, heighten the possibility of increased political tensions within Serbia's less-than-a-year old ruling coalition. This may bring early elections in 2008 and cause uncertainty about future policy choices."

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