Moody’s classifies the government’s financial strength as medium, due to the country’s low gov’t debt burden and weak fiscal policy. According to the latest research, Romania’s gov’t bond rating is stable at Baa3. Susceptibility to event risk is also assessed at medium, reflecting a number of transition – and credit crisis – related challenges, particularly a sharp economic recession, the unwinding of a large current account deficit and the aftermath of a credit boom. These risks are worsened by weak fiscal policy. A surge in gov’t spending in 2008 left the gov’t in a vulnerable state in the early part of the credit crisis, forcing the gov’t to borrow from the IMF and EU. The outlook is stable, balancing the poor macro picture against the financial support package from de EU and IMF and associated measures to reform fiscal policy and the public sector. The ratings would likely rise if institutional strength improved such that structural reforms were followed with greater rigor and consistency. Sustained implementation of a more prudent fiscal policy – increasing gov’t financial strength – would also place upward pressure on the ratings. Such changes are unlikely without a major change in the political environment.