The Moodys warns of downgrade Greece in case of early elections By downgrading of Greek economy yesterday warned the credit rating agency Moodys if you hold early national elections. At the same time, the Goldman Sachs (GS) reported that, although gathers little chance remains alive scenario to follow Cyprus model in Greece, where restrictions were placed on deposit withdrawals. Yesterday, Moodys said in its analysis that the early national elections would be a negative credit event» (credit negative). This warning comes as the firm believes that early elections jeopardize negotiations with the troika for the next day (after completion of the Memorandum), mitigate investor confidence and increase liquidity risks and financing of Greece. On the side of the GS believes that Greece 2015 will take between 6-15 billion. Euros to fully meet its obligations. Does not, not, happen in Greece than in Cyprus where the European Central Bank (ECB) had stopped providing liquidity to banks. At the same time, the markets continued to put pressure on Greek bonds yesterday, the yield on 3-year bonds to exceed 11%, an increase of around 73% within four days. The GS notes in its analysis that the pressures in the markets are not linked to the democratic process of elections or the possible change of government, regardless of what is to follow. Associated, however, with the risk of a break in policy and serious conflict between Greece and its international creditors. When the investment firm, the scope for significant regression of the reforms that have been implemented are very limited and any such move would lead to discontinuation of the countrys financing from lenders. In this context, GS believes that if not elected President of the Republic, will hold elections and pressures on the markets will continue. Meanwhile, the house goes to an analysis of Greeces financial commitments in 2015. Overall, these amounted to 24 billion. Euro, provided that you meet the goal for the primary surplus. Part of these liabilities can be covered by the same means, the GS. These include mainly: 1. The funds ensure the state of the bodies of government through short-term borrowing (repos). Through this process there are 9 billion. Euro for the obligations of the state. 2. The revenue from privatizations that have been estimated at 2 billion. Euro. 3. Resources 3 billion. Euro from the primary surplus. 4. Income from profit Eurosystem on Greek bonds if returned, EUR 2 billion. Euro. Considering the above, GS claims that Greece will need at least 6 billion. Euros extra funding in 2015 to meet the needs of and in the worst case (if no primary surplus not become privatizations etc.) the amount this may be increased up to 15 bn. euro. reforms In this context and in conjunction with that lending rates from the markets today is prohibitive for a new bond issue, the agency says the country needs to move on official lenders. Thus, he notes that there are 7.1 billion. EUR IMF, and the decision of the Eurogroup to offer precautionary credit line ECCL, provided that the evaluation of the troika will be completed. And for this to happen should proceed: - Further labor market reforms and the law on trade unions - Further pension reform. - Further budget cuts. Analysts believe the house, however, that as tight and if the government financing needs in 2015, is unlikely to become real issue as the ECB stands behind the Greek banking system. However, note that in case of conflict with creditors, potential disruption of liquidity from the ECB could lead to a crisis similar to that of Cyprus. Recall that in Cyprus banks have adopted deposit control measures and GS believes that at this point the fears about a possible Greek exit from the euro will culminate.
Posted on: Sat, 13 Dec 2014 06:47:28 +0000
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