July 25, 2011 by staff
Moody Greek, Greece’s credit rating has been reduced further by the rating agency Moody just days after European leaders hammered out a new rescue package in an attempt to bring the crisis of sovereign debt under control. The reduction rating from Caa1 Greece Ca – just a degree above the defect and thus the territory of junk – Moody said the probability of default Greek was “virtually 100 percent” due to the success of the sector private will result in the rescue was announced at the summit of euro zone last week. Creditors would incur “significant losses on their holdings of public debt,” Moody said in a statement.
The agreement reached by leaders of the eurozone including € 109bn financial assistance, plus private sector debt buyback and refinancing for a total of around € 50 billion until 2014. The Institute of International Finance said he expects the losses to investors, more than 20 percent. Immediately after the summit of the rating agency Fitch said that Greece fell into default “restricted” or selective.
However, Moody also said today that – while Greece still faces “medium term solvency challenges” due to the risks of implementing fiscal and economic reform – the overall rescue package “increased the likelihood “that the country is capable of stabilizing and then reducing the debt burden. The agreement also reduced the risk of contagion to other economies in the eurozone, the rating agency said.
Meanwhile, Fitch reaffirmed today the Czech Republic A + rating – which reflects its “improved public finances” and “substantial progress in pension reform,” said Michele Napolitano, associate director in the Emerging Europe Fitch sovereign team. As tensions in the coalition government “may disrupt the pace of budget deficit reduction,” exports continue to drive growth, the banking system is “resilient” and foreign debt is low.
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