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Moody's: Greek economy is threatened by a slow death

14 January 2010 / 09:01:50  GRReporter
2099 reads

Greek economy is threatened by “a slow death”, points out the international agency for the credit rating Moody’s. According to financial analyzers the government of PASOK has to start putting aside greater part of the national wealth in order to discharge the accumulated throughout the years foreign debt in a period when lenders ask for higher interest for the granting of new funds. Financial specialists forecast that in order to have stable incomes the Greek politicians most probably will turn to systematic increase of taxes. This on the other hand will lead to depreciation of the investment climate in the country and withdrawal of capital from the local market or in other words “slow death of the Greek economy”.

In a report on the state of the national deficit in the countries from the Euro zone the experts from Moody’s say that Greece and Portugal did not manage to preserve their competitiveness in the time of a crisis. Specifically about Greece the financial analyzers underline that the decrease of the credit rating to A2 in December 2009 is a reflection of the lack of confidence of the international markets in the capability of the socialistic government to “strengthen” the local economy. The report notices that Portugal has more time to better the macroeconomic climate of the country, which gives a reason for a better credit rating – AA2. Greece on the other side has to hurry with the introduction of decisive and effective measures for a change in the financial policy as a result of the drastic collapse of the public finances in the last few months.

There was an inevitable collapse of the Athens’ Stock Exchange after the announcement of the report of the international agency for credit rating Moody’s. Experts are saying that after the report about the “slow death” the next step which the government has to expect in a very short period of time is another decrease of the credit rating of the country.

Tags: MarketsEconomy credit rating
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