Thursday April 17, 2014 Search
Weather | Athens
19o C
12o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Moody's: Greek exit could hurt euro's existence

NEW YORK - Moody's Investors Service said late on Friday that a Greek exit from the euro could pose a threat to the currency's existence.

In addition, developments in Spain's banking sector that may require a European rescue package have negative credit-rating implications for the sovereign, Moody's said in a statement.

"Were Greece to leave the euro, posing a threat to the euro's continued existence, we would need to review all euro-area sovereign ratings, including those of the Aaa nations,» the rating agency said.

A Greek eurozone exit would particularly affect the sovereign ratings of Cyprus, Portugal, Ireland, Italy and Spain, Moody's said.

"Some (other) members of the European Union could also be affected, given the strong financial and trade linkages that exist between the members of the monetary union and the European Union,» Yves Lemay, a Moody's sovereign credit analyst in London, told Reuters.

Greeks head back to the polls on June 17 for a parliamentary election after an inconclusive vote on May 6. If they vote for socialist parties that have rejected the terms of a 130 billion-euro bailout plan, this could ultimately lead to Greece leaving the euro.

Should an agreement between whatever Greek government is formed and its international creditors be reached, Moody's said euro area ratings would generally hold at current levels for the time being.

Greece is rated just above default by Moody's at C, while Standard & Poor's gives it a CCC rating, similar to Fitch Ratings.

Spain is expected to ask the euro zone for help with recapitalizing its banks this weekend, sources in Brussels and Berlin told Reuters on Friday. It would be the fourth country to seek assistance since Europe's debt crisis began.

Lemay said that should that happen, Moody's would assess the program and terms of any help for Spanish banks «and then at that point conclude on whether there is a need to make any necessary adjustments."

Moody's said Spain's banking sector crisis is largely specific to the country itself and would not pose a major source of contagion to other euro area countries.

However, Italy, much like Spain, shares a growing funding reliance on the European Central Bank through its banks.

"The European Central Bank's role as a temporary liquidity provider cannot resolve tensions in the funding markets over the medium term, and has not done so,» Moody's said in its report.

"The temporary calm induced by the ECB Long Term Refinancing Operation (LTRO) has dissipated, while the pronounced trend in re-nationalization of government bond and other funding markets continues to expose peripheral countries to the loss of market access,» Moody's said.

Spain is rated A3 with a negative outlook by Moody's, putting it one notch above the BBB-plus rating with a negative outlook from S&P. Fitch on Thursday slashed Spain's credit rating by three notches to BBB with a negative outlook, putting it two notches below Moody's.

Moody's said the information regarding the state of the Spanish banking system and the increasing probability of Greece leaving the euro area represent material changes not currently encapsulated in its ratings.

[Reuters]

ekathimerini.com , Saturday June 9, 2012 (11:58)  
Euro award institutions choose Greece
Mission to woo Russian visitors
IOBE: Reforms are the only way for economy to return to growth
Piraeus steals show as stock index recovers
Judges warn GD holdups over lifting of immunity could lead to suspects´ release
The magistrates handling the investigation into the neo-Nazi Golden Dawn party’s alleged illegal activities warned Parliament Wednesday that some of the suspects in the case could be release...
Tensions in SYRIZA as EP election list finalized
Leftist opposition SYRIZA on Wednesday announced another six of its candidates for next month’s European Parliament elections, following a stormy session of the party’s political secretariat...
Inside News
SOCCER
Greek soccer turns fishier than ever
Soccer in Greece reached new lows in scenes unseen since the national team’s triumph in Euro 2004, as PAOK and Olympiakos served up a cup semifinal with PAOK emerging as the winner and the s...
BASKETBALL
Defense lets Olympiakos down at Madrid
Olympiakos played second fiddle to Real Madrid in a rather spectacular game in Spain on Tuesday going down 88-71 to trail 1-0 in the best-of-five quarterfinal series with the Spanish giant. ...
Inside Sports
COMMENTARY
Stopping the madness
Greek society is threatened by an overdose of madness and hatred. To be sure, behind the rise of polarization and of extreme – sometimes extremist – views is the harsh reality of the debt cr...
EDITORIAL
Fundamental contradictions
The deep division running through the ranks of the country’s main opposition party regarding the euro and how Greece’s negotiations with its partners and creditors ought to be carried out is...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greek soccer turns fishier than ever
2. Euro award institutions choose Greece
3. Mission to woo Russian visitors
4. IOBE: Reforms are the only way for economy to return to growth
5. Piraeus steals show as stock index recovers
6. Judges warn GD holdups over lifting of immunity could lead to suspects´ release
more news
Today
This Week
1. EU struggles to unpick the knot of Russia-Ukraine gas logistics
2. Stormy weather expected in northwest, central Greece
3. Greece to assist search for remains of Turkish pilot
4. Illegally claimed pensions cost state over 12.5 million euros
5. Bad weather leaves northwest town powerless
6. University admission exams to commence May 28
Today
This Week
1. Bomb explodes outside Bank of Greece
2. Time to take a hard look at debt sustainability, says OECD chief
3. For faith and country
4. CCTV footage from Nigrita Prison shows signs of inmate torture [Video]
5. Samaras sees no need for third bailout
6. Car bomb explodes outside Greek Central Bank building, no one hurt [Update]
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.