Moody's Investors Service said on Friday it may cut Belgium's Aa1 sovereign credit rating, citing its struggles to rein in high levels of public debt and concerns about long-term funding risks.
Belgium's rating was formally put on review for a possible downgrade by Moody's, which historically means a decision is due within 90 days. The current rating is one notch below triple-A status, the highest level given.
Belgium is rated AA-plus with a negative outlook from both Standard & Poor's and Fitch Ratings.
Moody's said in a press release it is concerned about, among other things, the "uncertainty around the impact on the already pressured balance sheet of the government of additional bank support measures which are likely to be needed."
The rating firm said it will assess the potential costs Belgium may incur in supporting the Belgium-French bank Dexia.
The review also reflects the increase in long-term funding risks for Europe, the rating firm said.