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Standard & Poor’s: Bankruptcy of Greece is Possible

10 June 2010 / 14:06:42  GRReporter
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Bankruptcy of Greece is still possible even in the short term, and the saving mechanism of the International Monetary Fund and the European Union only postponed it. This was the statement of Standard and Poor's analyst David Beers at the investment forum organized by Reuters in London. In his opinion Greece currently has golden opportunity to convince its residents that it applies a plan for reducing the government spending. The credit rating agency is quite critical to the Greek economy and at the end of April again lowered the credit rating of the country putting the investments in its economy in the junk category.  

His statement was only a day after the Bloomberg agency have announced the results of a survey held among 1001 financial analysts worldwide. 41 per cent of them believe that Greece is likely to leave the Euro zone and 34 percent believe that such a scenario is unlikely. According to analysts the other countries endangered after Greece are Portugal, then Spain and Ireland. The majority of respondents seriously doubt of the effectiveness of the mechanism for supporting the Eurozone countries amounting to 440 billion Euros. Only 23 percent believe that the mechanism will be able to prevent one or other country from leaving the Euro zone or to prevent rescheduling the debts of the countries. 40 percent believe that countries that suspend payments to creditors will remain within the Euro zone, while 35 percent believe that even leaving the Euro zone is not a guarantee that the country will not fail.

Meanwhile, the Greek National Statistics Office announced that the decline in the gross domestic product is larger than expected. Expectations were for negative GDP growth of 2.3 per cent and in the final the negative GDP growth for the first three months of the year was 2.5 per cent.

Tags: BakruptcyLeaving the Euro zone Economy
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