Greece: The Storm Did Not 'pass

By Author: Italo Zanotti
Total Articles: 62
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The situation in Greece is becoming increasingly difficult. The IMF-EU task force that has ended his mission in Athens has expressed the view, according to sources quoted by the media, that without new spending cuts, Greece will not be able to achieve the objectives set by the plan. The news comes as Moody's announced that it might cut its rating of Greece also has two levels within a few months if the government fails to implement the plan for return of deficits.
The pressure on the country has brought down the Athens stock exchange, which is marked in closing -2.82% falling below the critical threshold of 1900 points. The losses are driven by the banking sector with -4.9%.
While it is announced for Monday's visit to Athens by European Commissioner Olli Rehn's economy, experts from the Commission, the ECB and the IMF would, according to sources, expressed "reservations" about the revenue estimates for the Greek government because of a decline in GDP growth. And see a need to find other $ 4.8 billion to achieve the objectives of the plan.
The task force has left Athens yesterday after a three-day visit that ...
... ended the meeting with finance ministers, George Papaconstantinou, and Economy, Louka Katseli.
Moreover, as mentioned earlier, Moody's may cut the rating of Greece also has two levels within a few months if the government fails to implement the plan for return of deficits. Said Pierre Cailleteau, managing director for sovereign credit ratings of the U.S., in an interview with Bloomberg made yesterday in Tokyo. Just Wednesday, Standard & Poor's, rival agency Moody's warned of the possibility of a new Athens worsening credit if the promised reforms will not go into port.
"If in a few months we should see a significant deviation compared to the plan, then it is quite likely that we will adjust the rating accordingly," said Cailleteau. The Moody's rating on Greece today is equal to A2, the higher of two levels compared to that emitted by S & Fitch (BBB +, corresponding to Baa1 by Moody's).
If, however, Greece will be able to gradually realize the measures announced, Moody's will stabilize his "vote" on the debt Greek.
For its part, the difficult situation in Greece took place also the European Investment Bank, which stated that may fund 'investment projects delineated in Greece, but not provide financial assistance to the Greek State. He said EIB President Philippe Maystadt, according to reports from the Bloomberg.
Yesterday was also reported that the banks that helped Greece to mask his debt 'WOULD BE hours pushing the nation to the brink of financial ruin, making bets similar to those that made AIG almost shoulder strap, or using the credit contracts -default swap. It reports the New York Times, noting that the race to insure against the risk of default of Greece "is making it increasingly difficult to Athens to collect the necessary funds to meet its obligations."
"It's like buying fire insurance for the neighbor's house: it creates an incentive to burn it," says Philip Gisdakis, an analyst at Unicredit. "While the financial terms of Greece deteriorated, undermining the euro, the role played by Goldman Sachs and other large banks in the mask the real difficulties the country has raised criticism from European leaders.
"But even before this became apparent, a company little known and supported by Goldman, JPMorgan and a dozen other banks has created an index that allows market players to bet on the fact that Greece and other European countries may or may not fail. Last September, the Markit Group of London has launched the Western Sovx iTraxx Europe Index. The index "has not caused this situation has exacerbated" observed Sylvian R. Raynes, an expert in structured finance for R & R Consultant.
On this subject has also bent the Federal Reserve, which announced it is reviewing the arrangements by Goldman Sachs with Greece. He said Fed Chairman Ben Bernanke before the Senate Banking Committee. "We are reviewing several issues related to Goldman Sachs and other companies and their agreements with Greece."
Besides the Fed, on derivatives transactions undertaken by Goldman Sachs and other banks in Greece are - Bernanke has stressed - in the crosshairs of the SEC. The chairman of the Senate Banking Committee, Christopher Dodd, has asked the chairman of the Fed, in its view, banks should be restricted from using the swaps to bet on a country.
Credit default swaps can be useful in cover but "the use of these tools to intentionally destabilize a society or a country is counterproductive."