Fitch cuts Greece rating on soaring deficits, debt
By Dina Kyriakidou
ATHENS, Oct 22 (Reuters) - Fitch Ratings on Thursday downgraded Greece's debt to A- with a negative outlook, the first major agency to chastise the euro zone weakling for slumping finances since the Socialists came to power Oct. 4.
Fitch said its decision to cut its former A rating was due to much worse than expected 2009 fiscal deficit and debt estimates, as well as negative data revisions from previous years.
'These ongoing deficiencies materially undermine the credibility of medium-term fiscal consolidation plans,' it said in a statement.
New Finance Minister George Papaconstantinou told Greece's EU partners on Tuesday the budget deficit would reach 12.5 percent of gross domestic product (GDP) this year, more than double than the previous, conservative government had predicted.
'What is alarming about this downgrade is that having marked Greece down, Fitch have left the sovereign on negative outlook rather than on stable. That means they are saying more downgrade risks are possible in the future,' said Marc Ostwald, a bond analyst at Monument Securities in London.
Greece's debt, long the highest in the euro zone as a percent of GDP after Italy's, will reach 115 percent of GDP in 2009 and 120 percent of GDP in by end-2010, Fitch said.
The agency had Greece at A rating since December 2004 but downgraded the outlook to negative from stable in May this year, citing fiscal concerns.
Standard and Poor's cut Greece's rating to A- in January but kept the outlook at stable. Moody's ( MCO - news - people ) has an A1 rating on Greece and cut the outlook to stable from positive in February.
'A downgrade by another rating agency would not come as a surprise,' said Giada Giani, an economist with Citigroup ( C - news - people ) in London. 'The state of public finances is deteriorating faster than what was expected before.'

FISCAL WOES
The combination of fiscal troubles, a ballooning public debt and slow structural reforms have long kept Greece the lowest rated country in the euro zone.
Fitch said the scale of revisions of data from previous years underlined weaknesses in fiscal reporting and planning. The budget deficit for 2008 was revised to 7.7 percent of GDP from a 3.7 percent estimate in January.
'The recent revision of the budget deficit buried the last vestiges of credibility of Greece's fiscal management,' said Sebastian Wanke, economist with DekaBank in Frankfurt.
Papaconstantinou has announced a drastic overhaul of the Greek statistics services to make it completely independent in order to restore the credibility of Greek figures.
'The previous government chose to hide rather than correct problems and underestimate the intelligence of markets, which had already punished Greece with high lending rates,' his ministry said in a statement after the downgrade.
Spreads between Greek bonds and benchmark 10-year German Bunds, which reached record highs this winter, were around 131 basis points after briefly moving up a couple of points when Fitch issued its statement.
Euro group chairman Jean-Claude Juncker this week told chronic budget deficit offender Greece to put its finances in order and provide serious statistics because 'the game is over'.
The former conservative government came to power in 2004 and managed to bring Greece's budget deficit under the EU's 3 percent of GDP limit only briefly despite booming annual growth rates. It lost elections earlier this month, hit by scandals and the economic crisis.
The Socialists won on a ticket of taxing the rich, helping the poor and providing a stimulus package to kick start an economy teetering on the brink of recession.
(Addional reporting by Harry Papachristou, George Matlock in London; editing by Toby Chopra) Keywords: GREECE RATINGS/FITCH

Iniciado por Fray Guillermo

Fitch no sólo rebaja la calificación a A-, si no que pone a Grecia en perspectiva negativa, lo que quiere decir que pueden venir más rebajas. Después de las elecciones, ha venido el jarro de agua fría: el déficit para 2009 será del 12,5% del PIB, más del doble de lo que venía diciendo el anterior gobierno conservador.

UPDATE 3-Fitch cuts Greece rating on soaring deficits, debt - Forbes.com



Al loro con el último párrafo. Los socialistas ganaron las elecciones diciendo que iban a lanzar un paquete de estímulo económico. ¿De dónde piensan sacar el dinero?

Iniciado por Fray Guillermo

Al loro con el último párrafo. Los socialistas ganaron las elecciones diciendo que iban a lanzar un paquete de estímulo económico. ¿De dónde piensan sacar el dinero?

Iniciado por Gamu

Eso si, muchisimos Griegos han estudiado en buenas universidades y hablan muy bien inglés, la emigración hacia los USA y UK del talento juvenil está siendo masiva. Todos los griegos jovenes que conozco tienen planes de irse del país, no digo más...