It is unlikely that Coface will cease cover on eurozone countries, although downgrades may be on the cards, said Yves Zlotowski, chief economist at Coface.

The latest European countries to be downgraded in Coface’s risk assessment in January were Spain, Italy and Sweden. Spain and Italy were downgraded to A4, while Sweden was taken down to A1.

Coface recorded a 28% annual increase in non-payments from eurozone countries, while the global figure rose to 19%.

These announcements were made at a Coface breakfast briefing ahead of its country risk assessment reviews.

With the level of European corporate debt continuing to escalate since 2006, corporates are naturally feeling the squeeze.

This is particularly true for the German and French corporates, Zlotowski said, while Spain is also on the danger list with the highest level of European corporate debt.

Meanwhile, down to the increasing claims from British exporters since the crisis, Coface’s grading for the UK is set to A3 – a rating that Zlotowski said will not be upgraded any time soon.

“We would like to upgrade the UK soon but the macro-economic circumstances make this very unlikely.”

The rating agency has yet to announce its country review, but said that although it is unlikely that it will stop covering any of the eurozone countries, Italy and Spain are the worst placed for future downgrades.

Both Spain and Italy are suffering from structural problems in their corporate sector and 2013/14 is expected to be a challenging time for corporates of all sizes.

“Times of recession crisis tend to flush out the weak, yet so far we haven’t seen the level of failures that we should have done. I think there is still a tail to all of this and I think we’ll see a lot of corporates defaulting on their debt soon, and as a result a lot of acquisitions.”

However, it is a different story for corporates in the emerging markets as the country risk for Brazil, China and India is changing dramatically. This is due to a vast improvement in governments and payments systems, Zlotowski adds.

Grant Williams,credit insurance directo at Coface agreed: “The same can be said of the Middle East, you have a rise in the middle classes and an improved access to entrepreneurship. However, a lack of investment prevents these emerging middle classes from growing their own businesses without property rights and government intervention. You also need cultural changes in emerging countries to provide the means to change, such as internet access and travelling abroad.”