θα ήθελα να σας πω ένα μπράβο που σήμερα δεν είσαστε "στην λούφα" της συντεχνίας σας !

S&P May Downgrade Greece Within a Month on Risks to Budget Plan
February 24, 2010, 05:01 PM EST More From Businessweek

By Simon Kennedy and Maria Petrakis

Feb. 25 (Bloomberg) -- Standard & Poor’s may downgrade Greece’s credit rating again by the end of March as a weak economy and political opposition threaten the country’s ability to cut the European Union’s largest budget deficit.

“We believe that a further downgrade of Greece of one to two notches is possible within a month,” S&P analysts led by Marko Mrsnik in London said in a statement released late yesterday.

The warning may further undermine Greece’s standing in financial markets. The premium investors demand to hold the nation’s 10-year securities instead of those of Germany rose yesterday to the most in more than two weeks as unions staged a strike to resist budget cuts. The euro has fallen almost 10 percent against the dollar in the past two months on concern Greece’s fiscal woes may spread to other nations.

“A downgrade would make it much more difficult for Greece to turn things around,” said Andrew Brenner, managing director at Guggenheim Capital Markets LLC, a New-York based brokerage for institutional investors. “It would also continue to put pressure on the euro.”

S&P cut Greece’s rating in December from A- and signaled at the time it may reduce it again from BBB+. The government has since struggled to persuade investors it can slash its budget deficit from last year’s 12.7 percent of gross domestic product without outside help or default.



‘Feasibility’



S&P said the country’s willingness to keep funding itself in the commercial bond market is a key part of the assessment. The rating could be pressured by lower profitability at the country’s banks or a decline in public support for the budget plan, it said. EU assistance could be a support if it was likely to lead to a “sustained reduction” in borrowing costs.

“Downside risks for Greece’s real and nominal growth are likely to increase the size of needed fiscal consolidation, raising questions about the feasibility of the country’s ambitious budget goals,” S&P said. “Political risks for the timely implementation of the entirety of fiscal reforms continue to be material.”

The EU’s statistics office said late yesterday that Greece failed to notify the EU about a 2001 swap contract that helped mask the size of its debt and told the EU in 2008 that the government was prohibited from using off-balance sheet derivatives. The EU accounting watchdog last week ordered Greece to provide information on its swaps as it investigates whether the country used derivatives to hide the extent of its budget deficit.

Greek air-traffic controllers, customs and tax officials, train drivers, doctors at state-run hospitals and school teachers walked off the job yesterday to protest spending cuts. Police fired tear-gas and clashed with demonstrators in central Athens after a march organized by labor unions.



Budget Pledge



Greek bonds have slumped, driving up borrowing costs, as investors fear the government will fail to meet its pledge to cut its budget gap to 8.7 percent of GDP this year. It aims to cut the deficit below the EU’s 3 percent limit in 2012.

Prime Minister George Papandreou’s government needs to sell 53 billion euros ($72 billion) of debt this year, the equivalent of 20 percent of GDP. The yield on the country’s two-year note yesterday rose to the most since Feb. 9.

EU governments are looking for guarantees that Papandreou will slash spending before they spell out what help they may offer. EU and European Central Bank officials are in Athens this week to verify that budget cuts are being implemented.



More Measures



Under proposals adopted this month by euro-area finance ministers, the Greek government will have to take additional measures to cut its budget gap if it fails to satisfy the European Commission next month that its current strategy is on track. These may include higher value-added tax, a levy on luxury goods, higher energy taxes and spending cuts, they said.

German, French and Greek voters are “in denial” about Greece’s ability to get its deficit under control without external aid, Barry Eichengreen, an economics professor at the University of California at Berkeley and author of a 2006 history of the European economy, said in a Bloomberg Television interview yesterday.

Finance Minister George Papaconstantinou said Feb. 23 that the government will do “everything it needs to meet” its targets and that any decisions on possible new measures will be announced after talks with European governments.

Greece’s financial distress could be exacerbated at the end of this year when the ECB is due to revert to old collateral rules that were loosened during the global recession. If Moody’s Investors Service cuts its credit rating to the same level as the other major ratings companies, Greek government bonds would no longer be eligible as collateral at the ECB, making it more difficult for the nation to borrow.