PORTUGAL and GREECE ratings cut by S&P

lostinrates

lemonjelly wrote: »

Was Spain thought to be in trouble? I wondered if Italy might have been next. Reading through this, most didn't reckon on Spain did they?

Is there a domino effect going on?

Italy is always in trouble...sort of...but yes, spain has suffered quite badly, innit, in last couple of years.

inspector_monkfish

lemonjelly wrote: »

Was Spain thought to be in trouble? I wondered if Italy might have been next. Reading through this, most didn't reckon on Spain did they?

Is there a domino effect going on?

Spain was always a contender, as my post number 24 of this thread suggested

tomterm8

Generali wrote: »

There used to be a truism that no company in a country could have a higher credit rating than the Government as the Government could resort to printing money to pay back its debt.

Doesn't make sence in the Eurozone. Eurozone countries can't print currency. They are more like US states in that regard. Whereas Eurozone banks CAN access the deposit window of the ECB, which CAN print money. So, Eurozone banks could be a better credit risk than Eurostates.

lemonjelly

But is there some form of domino effect happening? It appears to be spreading. Is the spread because of individual economies? Or because of the euro? Or the relationship the economies have between each other?

worldtraveller

lemonjelly wrote: »

But is there some form of domino effect happening? It appears to be spreading. Is the spread because of individual economies? Or because of the euro? Or the relationship the economies have between each other?

Part of this surely must be down to pure uncertainty, which the markets hate, and the pathetic handling of it by the EU!

I believe that a meeting has been called for the 15th May? !!!!!!! Is this how fast the EU operates in a crisis?

Count_Dante

worldtraveller wrote: »

Part of this surely must be down to pure uncertainty, which the markets hate, and the pathetic handling of it by the EU!

I believe that a meeting has been called for the 15th May? !!!!!!! Is this how fast the EU operates in a crisis?

I believe Greece has to roll over some bonds before then. Suffice to say, they won't be able to do that. Something will have to give soon - either Germany delivers the cash, or Greece can't pay it's bills.

Degenerate

Count_Dante wrote: »

I believe Greece has to roll over some bonds before then. Suffice to say, they won't be able to do that. Something will have to give soon - either Germany delivers the cash, or Greece can't pay it's bills.

Actually, the next roll-over is due on the 19th of May, and I believe the meeting has been called for the 10th. Still unlikely to resolve things in time, given the glacial pace EU "leadership" moves.

JP45

Degenerate wrote: »

Actually, the next roll-over is due on the 19th of May, and I believe the meeting has been called for the 10th.

The timing of the meeting appears to be down to an election taking place in Germany on the 9th, as Ambrose Evans-Pritchard points out in his latest report on the crisis:

But Mrs Merkel is treading on eggshells. She faces a crucial election in North Rhine-Westphalia on May 9 that will decide control of the Bundesrat, and risks a court challenge if any rescue breaches the EU’s no `bail-out clause’. David Marsh, author of `The Euro: The Politics of the New Global Currency` said the moment of truth has come when Germany must decide whether to accept the burden of propping up Europe’s southern ring or let Greece fail and endanger its strategic investment in Europe’s post-War order.

“There are some senior figures who would like so see the gangrenous leg of Greece chopped off, to set an example. But they want to avoid leaving any German fingerprints on the blood-stained knife,” he said.

It is far from clear whether Athens will agree to further austerity as strikes hit the country day after day. Andreas Loverdos, Greece’s labour minister, said the EU-IMF team wants further wages cuts. “We cannot accept that.”

Greece knows it can opt for default at any time, setting off an EMU-wide crisis and bringing down Europe’s banks. It also knows that key figures in the Bundestag favour debt restructuring.

“Those who chased high yield by purchasing Greek debt must share the costs,“ said Volker Wissing, chair of Bundestag’s finance committee. Leo Dautzenberg from the Christian Democrats said banks should prepare for a `haircut’ of up to 50pc.

The ECB, Brussels, and the IMF have been fighting feverishly to head off such a move, fearing a financial chain-reaction.

Julian Jessop from Capital Economics said investors have been too complacent about the EMU crisis. “This could pose as big a risk to the global economy and financial markets as the collapse of Lehman Brothers in September 2008. In some respects the wider fall-out might even be worse,” he said.

The world has already used up its fiscal and monetary ammunition. What happens if there is a fresh shock?

MrEnglish

Quote:

The eu should eject greece



Then what about Portugal? Ireland even Italy?

Not even mentioning the `Poor` Eastern European countries, where would you stop?

But thats just the Euro, all around the world same problems. Every major currency has printing presses in overdrive.


There is something really wrong with the worlds currency system, this decade will be very interesting to see how things play out.

Nosht

MrEnglish wrote: »

Quote:

The eu should eject greece



Then what about Portugal? Ireland even Italy?

Not even mentioning the `Poor` Eastern European countries, where would you stop?

But thats just the Euro, all around the world same problems. Every major currency has printing presses in overdrive.


There is something really wrong with the worlds currency system, this decade will be very interesting to see how things play out.

The time is almost nigh for a World Currency. :eek:

N.