By Marius Zaharia and Jemima Kelly
LONDON (Reuters) - Euro zone countries still have much work to do to cut debt and boost growth and their credit ratings are unlikely to rise until they get their economies into better shape, a senior Standard & Poor’s official said on Tuesday.
S&P's head of sovereign ratings for Europe, Middle East and Africa, Moritz Kraemer, told Reuters in an interview that he saw a "calm period ahead" for ratings actions in Europe.
"Much of the homework still needs to be done. The over-indebtedness in a very low inflation environment poses huge risks to the growth outlook for the euro zone," he said on the sidelines of a conference in London.
"There is no need to raise the ratings until the (economic) fundamentals improve."
Kraemer said the countries that had made most progress in cutting debts included Ireland and Spain, and both had seen their ratings upgraded.
S&P raised Ireland by one notch to A-minus earlier this month, citing its brighter economic outlook
Last month, the agency raised Spain by one notch to triple-B on similar grounds.
Kraemer said the return to debt markets of Cyprus, which was bailed out just a year ago, and Greece had little impact on their ratings.
Cyprus, whose rating S&P raised one notch to B in April, last week raised 750 million euros ($1 billion) in a sale of five-year bonds.
A senior Greek finance ministry official told Reuters last week that Greece was preparing to issue a small-sized, medium-term bond in the coming weeks to follow on from its return to debt markets in April after a four-year break.
"Greece and Cyprus are far away from being self-sustaining and financing themselves. What's much more important ... is how the debt profile of the Greek government improves by the very significant lengthening of maturities of the official loans," Kraemer said.
"If you learn anything in the euro zone crisis, it's how quickly you can lose market access again. It would be premature to judge Greece on accessing the market."
Fitch, another major ratings agency, took a similar view last week, saying that while the bond issue was positive, the level of sovereign risk in Cyprus remained high.
Kraemer also said that if the European Central Bank went ahead with a program of asset purchases, known as quantitative easing (QE), it was unlikely to have a significant impact on sovereign credit ratings.
He said the ECB could not conduct QE in the same way as the Bank of England which has bought the bonds of just one country.
"We have 18 members in the euro area, we have a much less developed ABS (asset-backed securities) market for example. So I find it hard to see how the balance sheet would be expanded in a similar way," he said.
(Reporting by Marius Zaharia and Jemima Kelly, writing by Nigel Stephenson, editing by Jamie McGeever/Ruth Pitchford)