Galery

1

Fitch Ratings has lowered Greece's long-term rating (IDRs) deeper into non-investment grade status from B to CCC; the country’s short-term rating was downgraded from B to C.

The agency has justified its decision by "lack of market access, uncertain prospects of timely disbursement from official institutions, and tight liquidity conditions in the domestic banking sector have put extreme pressure on Greek government funding."

Fitch said that the government would survive the current liquidity squeeze without running arrears on debt obligations, but also highlighted that heightened risks have led to the downgrade.

The substantial run-off of deposits from Greek banks (they have reportedly dwindled by 15% since late November) ramps up the pressure on the Greek economy. Fitch banking system indicator now stands at B for Greece, which translates into poor creditworthiness.

The agency says there is a risk of imposing limitations on capital flight to stem the outflow of deposits from the country. This risk has resulted in knocking the Country Ceiling down to B- from 'BB'.

Meanwhile, it has transpired that Brussels has cancelled the expected Eurogroup meeting on Wednesday, which was expected to greenlight the tranches so badly needed by the Greek economy.

"It is unrealistic to expect a Eurogroup meeting next week, it could be held in two weeks," said a senior community official to Eleni Varvitsioti, a correspondent of SKAI TV.

The official explained that the technical discussions in Athens have been painfully slow and exacerbated by the furnishing of incorrect data by the Greeks. According to him, the Brussels Group discussion cannot only be based on a short list of reforms but on all items in the programme. This requires active work in Athens, which however has failed to materialise.

As the creditors have emphasised, the reforms will have to be approved by the Brussels Group first, then the list should be discussed at a higher level, then be handed over to the Euro Working Group, and finally reach the Eurogroup.

"We don't need nice words, we want procedures, decisions, diagrams and figures," Brussels said.

Greek government officials have repeatedly ruled out the possibility of including "recessionary" measures, such as cuts to salaries and pensions, in the list.

The list comprises 18 urgent measures designed to put into the coffers an extra €3.2 billion this year expected to come mainly from successfully combating tax evasion. According to reports, the list contains measures intended to tax hidden capital, fight smuggling, licence the media, introduce a fiscal receipts lottery designed to encourage consumers to ask for fiscal receipts when buying goods or services, etc.

Government officials have insisted that the measures "will not afflict employees, pensioners and people with medium and low incomes", and that reforms for the first time would not come at the expense of ‘the usual suspects’ but rather of the well-to-do.

It has also been said, that the proposals have been quantified and endorsed by the General Secretariat of Public Revenue of the Greek Ministry of Finance.

Greece will reportedly have a primary budget surplus of 1.5% of GDP for 2015, and a positive growth of 1.4%.