Sovereign risk – the UK, Russia and the Ukraine

Now this is interesting.  Below is the overall BSRI score for 50 countries on sovereign risk and perhaps it tells us something we should know about, vis-a-vis the UK for a start.

Those at the head of the table are a good risk and those below not to be touched with a barge pole.  So, in the light of Cameron’s and Osborne’s spin, test it out for yourself as to where we are.

sovereign risk

The components of the rating were fiscal space [40%], willingness to pay [30%], external finance position [20%] and financial health [10%].

Now, for the UK, take out the willingness to pay – we are always willing to pay, our intention:

willingness to pay

… and we’re left with the three other components of ability and overall risk factor. If you look at the UK’s other scores, you see we are in:

Fiscal space – the 4th of 5 sectors
External finance – near the bottom of sector 3
Financial sector – near the bottom of sector 4

That, ladies and gentlemen, is not very good.

Now compare Russia and the Ukraine. Russia’s never been happy to pay but take that out in order to look at strength.

If the UK is given 5 points for sector 1 and 1 point for sector 5, then it comes out as 7 points from 15.

Russia adds up to 12 points from 15.

Ukraine comes out as 6 points from 15 – poor but only 1 point behind us.

Let’s look at the U.S. [11 points] and China [10 points].

Now it’s pure speculation, mind, but what if this was behind Russia’s ability to be firm and the west’s inability to do anything about it? Also, is the EU and the U.S. backing the wrong horse in the Ukraine?