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The Athens stock exchange registered its consecutive collapse today and only for one day suffered a loss of 3,39 percent. The main index dropped under the psychological limit of 2100 points. The greatest losses suffered the corporations in the food industry (a result of the farmers protests) and the banks (a result of the negative prognosis for new decrease of the credit rating). With an increase today finished only the shares of the media groups and telecommunication companies.

Until July this year the new PASOK government has to put in action the taxation and social security reforms and to have decreased the national deficit by two points. From February observers of the European Union will visit Athens every month in order to get informed about the implementation of the Program for stability and development. If until June this year the government hasn’t reached the goals, the minister of finance Georgos Papakonstantinou said that additional measures will be introduced among which larger cuts of state expenses. On a press conference about the results of the meeting of the ministers of the Euro zone, Papakonstantinou completely rejected the scenario for an eventual increase of the Value Added Tax (VAT), however left the possibility for an increase on the excise duty on the fuels.

In respect to the spread index and the price at which the country is granting credits Papakonstantinou said that in the end of the first six months of 2010 Greece will have to borrow 50% of the amount for covering the financial needs or this is about 26 billion euro. The strict execution of the goals is of essential importance to the price of the financing of the Greek economy. In case that until July the national deficit does not reach the promised 10,7% of the GDP, Greece will be forced to cover several times the increased interests of the government bonds. Currently the difference in the price for crediting of Germany is two times and a half lower than the price for Greece.

As a result of this currently a new decrease of the credit rating of Greece is still an option. This was announced in the beginning of this week by the international assessment agency Standard & Poor’s. The assessment of the agency will depend on the level of success of the government of George Papandreou in the execution of the firm fiscal plan in the Program for stability and development of the Greek economy. The international markets remain cautious and wait for real results of the Greek government. The manager of Standard & Poor’s Marco Mrsnik said in an interview for Reuters: “There are still hazards of not fulfilling the program. A correct and effective application of the planned measures is of great importance for the credit score.” In December 2009 Standard & Poor’s decreased the credit rating of the country from A- to BBB+. According to the analyzers from the assessment agency, the measures which the government is planning to introduce will not lead to a permanent decrease of the national deficit and the foreign debt. Marco Mrsnik is definite that if society puts a social pressure on the government and does not support their actions for financial consolidation of the Greek economy then the assessment of Standard & Poor’s will be decreased again.

Moody’s and Fitch are two other international assessment agencies which also decreased the credit rating of Greece in the end of last year. The financial analyzer of Moody’s Sarah Carlson said that the main problem is the trust in the capabilities of the Greek government to realize the planned problems. She explains: “The heavy legal program which has to executed in three months time (the changes in the social security and taxation) and the lack of effective reforms up to now, make us doubt in the successful implementation of the Program for stability and development”. The same doubts are expressing the specialists from Fitch. The financial analyzer Bayan Cauden underlines that the external markets don’t see how the Greek government will guarantee the execution of the promises it made as currently not one of the previous governments managed to follow the recommendations of the European Commissioners.

The problem about the economic state of Greece and how it affects the Euro zone as a hole is a subject of wide public interest in Europe. In a publication of the British daily paper Financial Times the financial crises in Greece represents the most important and essential test for the integrity of the euro zone since its creation in 1999. The article points out the two most serious problems of the Greek reality – the grey economy and the increased public sector and the lack of determination in the government to deal with the problem. The story also points out the differences in the decrease of the volume of GDP between Greece and Germany – while the first has a decrease of only 1,1% of the GDP, the second (in spite of the strict financial policy) has a decrease of 5% of the GDP.

The example of Ireland is very indicative for the methods which could drag a country in a similar to Greece position from a complete financial collapse. In the publication it is written: “The Irish government undertook particularly firm measures on the account of its citizens in order to protect its place in the euro zone. On the other hand the Greek government has done nothing until now. As a result it is not surprising that the rest of the fifteen countries of the euro zone, the European central bank and the European financial commission are mad at all Greek politicians”. The publication continues its analysis: “In contrast to Ireland, Greece has a huge, ineffective and very well paid public sector. The conclusion from the Greek crisis is that many years of ineffective and inadequate government is needed to reach this position.”