Categories: Fundamental Analysis

Greece in new downgrade by S&P for “unsustainable” commitments

Europe and Greece negotiate over how the save the ruined economy

BBC – Ratings agency S&P has downgraded Greece’s credit rating again, saying it expects its debt and other financial commitments will be “unsustainable”.

It has dropped long and short-term sovereign credit ratings to CCC+/C from B-/B and says its outlook is negative.

Markets use sovereign ratings to work out the interest rate at which investors should lend to a country.

S&P says the economy has shrunk by 1% in six months despite the twin benefits of a lower oil price and a weak euro.

It says: “Greece’s solvency hinges increasingly on favourable business, financial, and economic conditions… In our view, these conditions have worsened.”

It says the government finances, which appeared to be improving slightly last year, have been dented by weaker economic activity and rising arrears on taxes.

Time running out.

Since the end of November 2014, Greek banks have lost about 14% of their deposit base to customer withdrawals and deposit outflows have continued.

The conditions have been made worse by the uncertainty over the negotiations between the new Greek government and its main creditors, the International Monetary Fund, the European Commission and the European Central Bank.

S&P says that economic prospects could deteriorate further unless Greece reaches a deal over the next €7.2bn tranche of its bailout loan.

But time is running out. The ratings agency says: “If the stalemate between Greece and its official lenders is not resolved before the middle of May, then there might not be enough time for the Greek parliament to enact whatever conditions are attached to a revised lending program.”

Source:bbc.com Image: getty images

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Vladimir Ribakov

Following 11+ years of trading experience, trading my own accounts as well as for hedge funds and brokerages, I have decided to fulfill my destiny and to personally mentor Forex and Commodities traders. When I released the “Broker Nightmare” (software that hides trades from brokers) 8 years ago, I found an overwhelming number of frustrated people who genuinely wanted to learn how to trade the Forex market, but instead found themselves scammed and misled. Over the years I have also release other trading systems based on my trading strategies, and met a lot of people on my worldwide Forex seminars. We’ve formed a close Forex community and we meet once or twice a year in various locations in Europe.

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