Relief 'in sight' after EU crisis summit: S&P

(WASHINGTON) - The European Union crisis summit delivered measures to stem eurozone financial turmoil, but substantial risks remain in implementing them, US ratings agency Standard & Poor's said Tuesday.

"Some relief could be in sight for sovereigns" in the eurozone following the agreements reached at the eurozone summit on Friday," S&P said.

"In our view, these agreements could begin to stabilize the eurozone and staunch any further weakening of sovereign creditworthiness."

But the ratings firm warned that it was too soon to say whether its ratings on the countries would be adjusted, following the summit breakthrough to let the future European Stability Mechanism (ESM) recapitalize ailing banks directly.

"Decisions made at the eurozone summit reflect policymakers' growing recognition that the current crisis is not exclusively a budgetary crisis of excessive public debt and deficits, but that it's also a balance-of-payments crisis," S&P said in a statement.

"This has been our view for some time, and we see the broadening of the policy response as a positive step. Measures that stabilize cross-border capital flows are now complementing fiscal austerity programs."

However, it warned, "we believe the risks associated with implementing these measures are significant, and it is unclear to us whether policymakers will be able to build on the agreements."

"As a result, the agreements reached at the summit have no immediate implications for our sovereign ratings in the eurozone."