ECONOMY

MPs looking to take Moody?s to court

Ten members of Parliament from Greece?s ruling Socialist party signed a petition on Wednesday urging the government to take legal action against Moody?s, claiming the agency had deliberately intended to weaken the country?s negotiating position ahead of this week?s European Union summit.

The petition claims that Moody?s arguments for downgrading Greece?s debt rating by three notches are weak and not supported by real conditions while the downgrade?s timing raises suspicions of attempts to weaken the country?s bargaining position.

Earlier this week, Moody?s downgraded Greece?s debt rating from B1 to Ba1 amid worries that the country will end up having to restructure its massive debts.

As well as warning of major implementation risks associated with the government?s economic program, Moody?s noted the considerable difficulties Greece has in raising revenues and highlighted the risk of more onerous conditions when the current bailout package ends in 2013.

The decision spurred a selloff on the Athens bourse on Tuesday, sending banks plunging more than 6 percent. On Wednesday, banks rebounded 2.17 percent.

Moody?s also downgraded six Greek banks on Wednesday on the grounds that the government?s credit strength serves as a key input in assessing the capacity of a country to support its banking system.

The action affects the deposit and debt ratings of National Bank (NBG), Eurobank EFG, Alpha Bank, Piraeus Bank, ATEbank and Attica Bank.

Moody?s downgraded NBG to Ba3 from Ba1, Eurobank to Ba3 from Ba1, Alpha Bank to Ba3 from Ba1, Piraeus Bank to Ba3 from Ba1, ATEbank to B1 from Ba2, and Attica Bank to B1 from Ba2.