The rating of the Greek national debt has been downgraded
9 Dec
Greece will have serious problems with his national debt because its credit ratings have been downgraded to the lowest level in the eurozone on Tuesday, as its deteriorated finances began to spread fear all over the world.
The incoming national debt disaster caused heavy selling of Greek Stocks and bonds and the shares on the Athens stock exchange fell more than 6 per cent.
For first time in 10 years, a leading rating agency, Fitch, has given to Greece the BBB plus grade with negative Outlook, that is lower than A.
Maybe this building will be for sale to pay Greek national debt.
The Greek Finance Minister,George Papaconstantinou, said that the downgrade reflected Greece’s “mounting credibility gap in recent years and an exceptionally difficult fiscal situation” faced by the new Socialist government, which took over in October.
the other main ratings agencies,Moody’s and Standard & Poor’s, have also warned Greece that they can also downgrade ratings on Greek national debt, that is forecast to rise to 125 per cent of gross domestic product next year.
Concern focuses on whether Greece will be able to contain its national debt by implementing a new revenue-raising measures swiftly enough to cut the deficit from 12.7 per cent to 9.1 per cent of GDP next year in line with budget projections.
Although the ECB will keep the emergency rules next year, Greece must be careful with his national debt and reduce its deficit soon. Although the relaxed ECB rules allow for collateral of bonds with ratings of BBB minus, Greece could experience problems in raise bonds, and this may lead to more interests that could at the same time, increase the Greek national debt still more.
About this national debt and solvency issue, Goldman Sachs said: “Unless the ECB fiddles with its rules before the end of next year, then from the beginning of 2011, Greek sovereign bonds will no longer be eligible for ECB collateral.”
Today we also have known, that Barack Obama will use $200bn from the remaining of the emergency packages. This time instead of paying the Banks the money will help the small companies that are employing 2/3 of the population. The republicans believe that this money should be used to reduce the national debt, i will explain it tomorrow.
Related posts:
- The Greek National Debt Isn’t Trash After All
- The International Monetary Fund will asses on the Greek National Debt
- Fitch reduced the rating of Spanish national debt
- The President of Fitch Considers that the National Debt Issue in Spain,Greece and Portugal is “Annoying”
- The interest rate of Greek debt reached 8.28%
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