Greece: if austerity doesn't work... Try more austerity! | 287 comments (287 topical, 0 editorial, 0 hidden)

Re: Now it's French banks (none / 1)

The opponents argue that rating agencies will interpret the early rollover as a default, causing actual default, and spreading elsewhere.

What, they mean that Greece having been shut out of the capital markets for over a year and recently downrated to the worst credit rating on the planet isn't bad enough already?

In that context, what is it that the "rescue" is going to accomplish for Greece? They acknowledge it won't return to the markets until 2013, and it will remain with a high debt to GDP ratio so its rating will continue to be low even after that.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Wed Jun 15th, 2011 at 03:22:46 PM EST
[ Parent ]

Re: Now it's French banks (4.00 / 3)

what is it that the "rescue" is going to accomplish for Greece?

It looks like concrete boots for the Greeks -- to keep the bodies from popping up after they have been thrown overboard. The Greeks should just write all the debt down to 30-50% and inform the creditors that they will write it down to zero if they try any more economic blackmail or try to kick Greece out of the EU.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jun 15th, 2011 at 04:57:58 PM EST
[ Parent ]

Re: Now it's French banks (none / 0)

downrated to the worst credit rating on the planet isn't bad enough already?

I didn't realise until reading it yesterday, that for some agencies, there is a rating below C: D.

Bond credit rating - Wikipedia, the free encyclopedia

Moody's Standards & Poor Fitch Credit worthiness
- C C The obligor is CURRENTLY HIGHLY-VULNERABLE to nonpayment. May be used where a bankruptcy petition has been filed.
C D D An obligor has failed to pay one or more of its financial obligations (rated or unrated) when it became due.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Jun 15th, 2011 at 06:10:10 PM EST
[ Parent ]

Re: Now it's French banks (none / 1)

Well, 'D' is "in default". It's not actually a rating of future creditworthiness.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Thu Jun 16th, 2011 at 02:01:00 AM EST
[ Parent ]

Greece: if austerity doesn't work... Try more austerity! | 287 comments (287 topical, 0 editorial, 0 hidden)

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