Tuesday, April 27, 2010

News: Greek economy rated junk by S&P

"The downgrade results from our updated assessment of the political, economic and budgetary conditions that the Greek government faces in its efforts to put the public debt burden onto a sustained downward trajectory" Marko Mrsnik, S&P credit analyst.

Standard & Poor's Ratings Services, that publishes financial research and analysis on stocks and bonds, downgraded Greece to a status of 'junk', as the government's economy actions are narrowing the, already, weak economic health of the country. Greek ratings went to the bottom, being lowered by three notches to double-B-plus, the lower level of S&P list, making Greece the first Eurozone member to achieve this status

News came after this Saturday, German parties took an aggressive stance against Greek, suggesting an expulsion of Greece from the Eurozone. The hard line came as Greek PM, George Papandreou, asked European Union and International Monetary Fund for a €45 bn aid

S&P observation is that a debt of 13% of gross domestic product (country's overall economic output) is a burden to Greek recovery, and should be the primary mission of government, as solve it would be the first step to solve the economic problems.

The deadline of Greek 'fundraising" is 19 May, expecting to achieve at least €9 bn euros. If not, recovery would become, nearly impossible.

Germans warned to Greek investors that recovery, if possible, will come with great effort and discipline. S&P are even more pessimistic: 'There is an average chance, between 30% and 50% of get the money back'

Also, the agency noted that long-term growth will be weak, making the Greek economy weak and less credit-worthy

Portugal was downgraded two-notch, and is expected a struggle of Portugal's economy to keep his debt under a sensible level, at least until 2013.

Read also:

S&P downgrades Greek debt to junk status

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Special: Greek crisis


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