French export credit agency Coface upgraded Macedonia's business environment assessment from 'C' to 'B' in its last three-month report.

Macedonia, which plans to join the European Union, has made great strides in terms of governance, reducing corruption and increasing the respect for the law, the agency says.

Along with Macedonia, the business environment assessments of Poland and Lithuania have been also upgraded (from A3 to A2). These three countries have in common an improvement in the access to companies' financial information, Coface says.

In contrast, the business environment assessments of Greece and Cyprus have been downgraded to A3, which places them among the worst rated countries in the European Union. Only Romania and Bulgaria (A4) have worse assessments. Coface finds access to financial information to be difficult and remarks a worsening of companies' payment behaviour, which indicates greater difficulties concerning debt collection. Cyprus also stands out for its opaque banking system.

Greece (B) and Cyprus (A4) have also seen their country risk assessments drop a notch. These downgrades reflect the impact of the Greek sovereign debt crisis on the country's companies, which is conveyed through various channels: bank credit is difficult to obtain by companies and, if obtained, is expensive. The macroeconomic climate deteriorates as the recession deepens.

Lastly, companies are bearing the brunt of the austerity budget plan, which, in some cases, could lead to them experiencing overdue payments owed to them by the country's administration. Furthermore, Coface notes deterioration in the payment behaviour of Greek companies in 2011. The country risk for Cyprus has increased because of its banks' exposure to the Greek risk.

The country rating assigned by Coface reflects the extent to which a country's economic, financial, and political outlook influences financial commitments of local companies.

The Compagnie Française d'Assurance pour le Commerce Extérieur (Coface) was founded in 1946 as the French export credit agency. It was subsequently privatized by the government and continued as a commercial enterprise. Currently, COFACE is owned by the bank group Natixis.