Xinhua News Agency, Berlin, October 25 (Reporter Che Yunlong, Zhang Yirong) The European credit rating agency Scope Rating Company recently released a report downgrading the sovereign credit rating of the United States from "AA" to "AA-" because of the continuous deterioration of the public finance situation in the United States and the decline of government governance standards.

The agency said that the continued deterioration of U.S. public finances is mostly reflected in the continued high fiscal deficit, rising interest spending and limited budget flexibility. These factors together drive the continued rise in government debt levels.The report predicts that without substantial reforms, the U.S. government debt ratio of gross domestic product (GDP) by 2030 will rise to 140%, far higher than most sovereign countries.

The report pointed out that the decline of government governance standards is also an important reason for the downgrade. The agency believes that the administrative power in the United States is increasingly centralized, and the Trump administration has repeatedly ignored court orders, challenged judicial authority, and evaded congressional supervision, which has reduced the predictability and stability of policy formulation and increased the risk of policy mistakes. The uncertainty shown by the United States in tariff negotiations with major trading partners is an example.

The agency also said that the U.S. rating outlook is ¡°stable¡± and that the overall balance between rating increases and downsetting risks over the next 12 to 18 months.The report emphasizes that downside risks include a continued rise in debt levels, and that the U.S. dollar¡¯s position as a global reserve currency could be significantly weakened, leading to a global decline in demand for U.S. government bonds.

The scope rating company is headquartered in Berlin, Germany, and will become the first European credit rating agency to be accredited by the European Central Bank in 2023.