Fresh debt rat­ing cut from S&P

Min­istry says de­ci­sion came at a time of no new neg­a­tive de­vel­op­ments and is there­fore un­jus­ti­fied

Kathimerini English - - Business & Finance -

Stan­dard & Poor’s down­graded Greece’s sov­er­eign debt rat­ing yes­ter­day on con­cerns that its in­ter­na­tional cred­i­tors may have to wait longer to get their money back while Euro­pean authorities ad­mit­ted that Athens may get more help.

“The down­grade re­flects our view of in­creas­ing sen­ti­ment among Greece’s key eu­ro­zone of­fi­cial cred­i­tors to ex­tend the debt pay­ment ma­tu­ri­ties of their 80 bil­lion eu­ros of bi­lat­eral loans pooled by the Euro­pean Com­mis­sion,” the credit rat­ing agency said in a state­ment.

“As part of such an ex­ten­sion, we be­lieve the eu­ro­zone cred­i­tor gov­ern­ments would likely seek ‘com­pa­ra­bil­ity of treat­ment’ from com­mer­cial cred­i­tors in the form of their sim­i­larly ex­tend­ing bond and loan ma­tu­ri­ties.”

In re­sponse to the lat­est down­grade, Greece’s Fi­nance Min­istry said that the de­ci­sion “comes at a time when there have been no new neg­a­tive de­vel­op­ments or de­ci­sions since the last rat­ing ac­tion by the agency just over a month ago and there­fore is not jus­ti­fied.”

Euro­pean authorities have con­ceded they may need to do more to help Greece with its mas­sive debts more than a year af­ter it was first bailed out, but ro­bustly de­nied the coun­try wants to leave the com­mon cur­rency.

Ex­perts from the Euro­pean Union and the In­ter­na­tional Mon­e­tary Fund are in Greece to check up on eco­nomic re­forms promised in re­turn for 110 bil­lion eu­ros in res­cue loans last year.

They will also ex­am­ine whether the cur­rent pro­gram will be enough to al­low Athens to stand on its own feet again when the loans run out in 2013 – a sce­nario most in­vestors think un­likely.

When asked about the pos­si­bil­ity of addi- tional help be­ing pro­vided to Greece, Martin Kot­thaus, spokesman for Ger­man Fi­nance Min­is­ter Wolf­gang Schaeu­ble, said yes­ter­day that the lat­est re­sults on the coun­try will have to be eval­u­ated be­fore mak­ing any fur­ther de­ci­sions.

French Fi­nance Min­is­ter Christine La­garde said yes­ter­day that last week’s meet­ing of Euro­pean Union lead­ers was held to re­view the Greek bailout plan.

These talks “were not in­tended to be com­mu­ni­cated on, they were to pre­pare for the fi­nance min­is­ters’ meet­ing of May 16,” La­garde said dur­ing a meet­ing in Paris.

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