Economic Condition of the European Union countries and Level of Rating

Credit rating agencies have a significant impact on the securities market facilitating investment decisions on the basis of ready-made benchmarks. In this way they contribute to reducing the asymmetries and costs of obtaining information necessary to make decisions regarding buying or selling financial instruments, taking into account the debtor's estimated risk of default. The increased significance of the assessments made by the rating agencies refers closely to the rapid development of the debt security market and thus emerging demand on the part of the buyers of those securities for an independent analysis which would determine the issuer's financial standing. The assessments which are published using special symbols reflects country's ability to raise capital and its cost. The purpose of the article is to evaluate the relationship between the economic condition of the European Union countries and the assessment issued by the rating agencies such as Standard & Poor's, Fitch, Moody's. The economic condition of country will be described using a synthetic variable, and ratings will be transferred to the ordinal scale, hence to assess the relationship with the use of Spearman's rank correlation coefficient.