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Fitch decreased the credit rating of Greece to BBB-

09 April 2010 / 23:04:34  GRReporter
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The international credit rating agency Fitch decreased its rare for Greece from BBB+ to BBB- which is two whole units and preserved its negative expectations for the development of the Greek economy. The decision of the agency was preceded by the very unfavorable market conditions for the financing of the internal debt of the country. According to Fithc Greece will ask for international subsidy in order to handle its financial problems.

Right after the decision of the agency the countries from the euro zone were forced to make a statement. Currently it does not have the form of a specific text with specific parameters of the financial support. The specific dimensions depend on the source which is quoted. The various Greek media will quote various sources and that is why the interest at which countries from the euro zone will grant loans to Greece varies between 3,5% in the most optimistic case to 5%. The difference is calculated on hundreds of billions and is of great importance to the Greek economy.

As GRReporter already wrote yesterday, another credit rating agency Standard & Poor’s warned that Greece is threatened by new decreases of its credit rating if it keeps the high interest rate at which it sells its foreign debt. Standard & Poor’s predicts deterioration of the opportunities for the Program for stability to achieve its goals.

At the same time the Greek government officially denied to be considering at all as an option a subsidy from the countries members of the euro zone. “There is no such dilemma. It is good that it exists as an extreme rescue network, however we will not use it”, said for the reporters the Minister of finance Georgios Papakonstantinou when exiting the office of the Prime Minister. According to him in the last two days the support which the leaders from the euro zone agreed on at March 25th, has been made more specific. “As I already mentioned our country will not take advantage of this mechanism, however it is very important to us that it exists”, underlined Papakonstantinou. The Minister of finance also said that the price which Greece is paying in order to finance its internal debt is very disturbing, however the most important thing is that the government will be able to get the budget deficit under control. After this the markets will also calm down.

Today’s day was marked by a wave of statements of financial institutions as the Swiss bank UBS, the American investment bank Goldman Sachs, the Dutch Fortis and the Japanese Nomura, which predicted that during this weekend Greece will officially turn for support to the International Monetary Fund. What will happen in the next days no one knows. Definitely however a battle of nerves is going on between the markets who only have to finance the problematic Greek budget and the governments of the euro zone, who do not wish to accept their own impossibility to pay for the Greek national debt.

Tags: Fitch agency decrease of the credit rating Economy Stock news
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