Monday Jul 28, 2014 Search
Weather | Athens
31o C
23o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek sovereign debt rating to be upgraded by Fitch

By Nikos Chrysoloras

Greece’s credit rating will be increased one level by Fitch Ratings, which cited an improving economic and fiscal outlook for the country that sparked Europe’s sovereign debt crisis.

Greece’s long-term debt will be raised to B, five levels below investment grade, from B-, Fitch said in a draft report obtained by Bloomberg News. The upgrade may be announced tomorrow.

“Greece achieved a primary surplus in the general government account in 2013, a key target” with reference to the European Union-IMF financial assistance program and “an overperformance relative to budget,” the New York-based rating company said in the draft.

Greece holds European Parliament and a second round of local and regional elections on Sunday following the country’s first bond auction in four years. The nation, which set off Europe’s sovereign debt crisis in 2009 when it revealed its budget deficit had ballooned to over 15 percent of total economic output, is poised to return to growth after six consecutive years of contraction, Fitch said.

“The economy is bottoming out,” Fitch said. “Economic data outturns have been encouraging and support our baseline expectation that the recovery will gradually take hold this year.” Peter Fitzpatrick, a London-based spokesman for Fitch, declined to comment when contacted by telephone.

Political Instability

Four years and three prime ministers after Greece’s then Premier George Papandreou requested an international bailout in return for budget cuts and an economic overhaul that cost him his job, political instability still haunts Greece. If the leftist Syriza party wins the election on May 25, as opinion polls project, the blow may undo the coalition led by New Democracy and unravel the fragile progress toward stability.

“Political risk remains high,” according to the report. “An early general election in 1Q15 is the most likely scenario, although a snap election this year cannot be discounted.”

Greece, which asked private creditors to accept losses on their government bond holdings in the biggest debt restructuring in history, has been kept afloat since 2010 through a 240 billion-euro ($328 billion) lifeline from the euro area member states, the European Central Bank and the International Monetary Fund.

Fitch, which raised Greece to B- in May last year, will say in its report that “capital market conditions have improved significantly with large corporates and the sovereign able to re-access funding.”

Yields Fall

In almost half the instances, yields on government bonds fall when a rating action by Moody’s Investors Service, Fitch, and Standard & Poor’s suggested they should climb, according to data compiled by Bloomberg on 314 upgrades, downgrades and outlook changes going back as far as the 1970s. When S&P downgraded the U.S. government in August 2011, bonds rose and pushed Treasury yields to record lows.

S&P and Moody’s rate Greece B- and B3, several steps below investment grade. S&P on March 21 maintained Greece’s credit rating unchanged, with a stable outlook, citing the country’s high debt load.

“To a large degree, Greece’s adjustment has taken place through steep declines in real GDP and employment,” Fitch said.

The rating company added that “there has also been a notable wage and price adjustment,” consumer prices are falling, and “despite mixed progress” in officially sanctioned structural reform, there have been “significant advances” in areas such as public administration and labor market flexibility.

[Bloomberg]

ekathimerini.com , Thursday May 22, 2014 (21:03)  
Euro inflation seen testing ECB patience as stimulus takes time
Next six to eight months will be crucial
Athens to help track accounts of US citizens
Private sector salaries keep shrinking
Tree collapses in village square, killing nine-year-old boy
A nine-year-old boy has been killed in a village in central Greece after a plane tree collapsed on top of him. The accident happened on Sunday night in the central square of a village called...
Samaras to meet Cypriot President Anastasiades in Athens
Cypriot President Nicos Anastasiades is due to hold talks at noon on Monday for with Greek Prime Minister Antonis Samaras in Athens. Anastasiades will be accompanied by Foreign Minister Ioan...
Inside News
VOLLEYBALL
Volleyball national team second in European League
Much as the national volleyball team tried to repeat in the finals of the European League the feat it had achieved in the semifinals, it failed to overturn the advantage Montenegro had got f...
SOCCER
Ranieri says he has little to change in Greek national team
The Hellenic Football Federation (EPO) presented Claudio Ranieri as the new Greece coach for the next couple of years, after the Italian manager signed his contract in Athens on Friday. “I l...
Inside Sports
COMMENTARY
Weighing all the factors
Certain people in the know continue to believe that snap elections will take place in the fall. Prime Minister Antonis Samaras is obviously aware of this trend, which is why he told Parliame...
EDITORIAL
Clear rules, for everyone
If we want to deal with the economic crisis, we need clear rules. A large number of individuals and businesses have amassed huge debts they cannot service. And some worrying symptoms have al...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Tree collapses in village square, killing nine-year-old boy
2. Samaras to meet Cypriot President Anastasiades in Athens
3. Maziotis moved to Diavata Prison in Thessaloniki
4. Euro inflation seen testing ECB patience as stimulus takes time
5. Defense Minister Avramopoulos to represent Greece at European Commission
6. Volleyball national team second in European League
more news
Today
This Week
1. Defense Minister Avramopoulos to represent Greece at European Commission
2. Euro inflation seen testing ECB patience as stimulus takes time
3. Maziotis moved to Diavata Prison in Thessaloniki
4. Samaras to meet Cypriot President Anastasiades in Athens
5. Tree collapses in village square, killing nine-year-old boy
6. French tourist dies after falling off balcony in Crete
Today
This Week
1. Climber dies in Mount Olympus fall
2. Greek sovereign debt at 174.1 percent of GDP in first quarter
3. Unequal after death
4. Hedge fund Dromeus turns Greek tragedy to triumph with 160 pct gain
5. Quadriplegic woman on life support 'dies due to unpaid power bills'
6. Front-line threats
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.