Moody's declares Greece in default of debt

Moody's declares Greece in default of debt

Moody's declared Greece in default on its debt Friday after Athens carved out a deal with private creditors for a bond exchange that will write off 107 billion euros ($140 billion) of its debt.

Moody's pointed out that even as 85.8 percent of the holders of Greek-law bonds had signed onto the deal, the exercise of collective action clauses that Athens is applying to its bonds will force the remaining bondholders to participate.

Overall the cost to bondholders, based on the net present value of the debt, will be at least 70 percent of the investment, Moody's said.

http://ca.news.yahoo.com/moodys-declares-greece-default-debt-232804003.html

Legal skull-duggery in Greece may doom Portuga

Legal skull-duggery in Greece may doom Portugal

Europe has ring-fenced Greece's debt crisis for now but its escalating recourse to legal legerdemain has shattered the trust of global bond markets and may ultimately expose Portugal, Spain, and Italy to greater danger.
By Ambrose Evans-Pritchard

"The rule of law has been treated with contempt," said Marc Ostwald from Monument Securities. "This will lead to litigation for the next ten years. It has become a massive impediment for long-term investors, and people will now be very wary about Portugal."

At the start of the crisis EU leaders declared it unthinkable that any eurozone state should require debt relief, let alone default. Each pledge was breached, and the haircut imposed on banks, insurers, and pension funds ratcheted up to 75pc.

Last month the European Central Bank exercised its droit du seigneur, exempting itself from loses on Greek bonds. The instant effect was to concentrate more loss on other bondholders. "This has set a major precedent," said Marchel Alexandrovich from Jefferies Fixed Income. "It does not matter how often the EU authorities repeat that Greece is a 'one-off' case, nobody in the markets believes them."

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9132216/Legal-skull-duggery-in-Greece-may-doom-Portugal.html

Alarm sounds over Spain’s rising public debt

Alarm sounds over Spain’s rising public debt
By Victor Mallet in Madrid

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In the years of economic crisis since the collapse of Lehman Brothers in 2008, Spanish leaders have always been able to boast to nervous investors that Spain’s public debt burden – however bad its annual budget deficits – is smaller than Germany’s and well below the European Union average.
Economists, business executives and even government officials, however, have started to sound the alarm about the rapid and unsustainable growth of the country’s public debt.

http://www.ft.com/intl/cms/s/0/2c02be0c-6870-11e1-b803-00144feabdc0.html#axzz1odgBr95N

FITCH DOWNGRADES GREECE TO 'RESTRICTED DEFAULT'

FITCH DOWNGRADES GREECE TO 'RESTRICTED DEFAULT'
Simone Foxman | Mar. 9, 2012, 10:10 AM

Fitch just downgraded Greece from "C" to "restricted default."

This designation hardly comes as a surprise, since the ratings agency had previously said that the country's planned debt restructuring would throw it into restricted default.

Fitch's decision mirrors a recent downgrade from Standard & Poor's which put Greece in "selective default."
Unlike a disorderly default, in a "restricted" or "selective" default Greece has not actually been declared insolvent.
Fitch said it will raise Greece's issuer rating from "RD" after its debt swap has been completed on March 12.

Read more: http://www.businessinsider.com/fitch-downgrades-greece-to-restricted-default-2012-3#ixzz1odfoIi00

Germany drawing up plans for Greece to leave the euro

Germany drawing up plans for Greece to leave the euro

Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiralling out of control - with or without a second bailout.
By Bruno Waterfield, Brussels8:16PM GMT 18 Feb 2012

The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.

http://www.telegraph.co.uk/finance/financialcrisis/9091021/Germany-drawing-up-plans-for-Greece-to-leave-the-euro.html

Greek economy spirals down as EU forces final catharsis

Greek economy spirals down as EU forces final catharsis
A Greek default and traumatic ejection from the euro moved a step closer last night after eurozone finance ministers cancelled a crucial meeting, accusing Athens of failing to flesh out austerity cuts.

By Ambrose Evans-Pritchard, in Athens8:33PM GMT 14 Feb 2012

The escalating brinkmanship came as fresh data showed that Greece's economy contracted by 6.8pc last year and at an accelerating 7pc rate in the last quarter, far worse than expected by the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) "troika".

The country appears to be in a self-feeding downward spiral that is playing havoc with budget targets, leaving Greece with a Sisyphean task of ever deeper cuts.


http://www.telegraph.co.uk/finance/financialcrisis/9082843/Greek-economy-spirals-down-as-EU-forces-final-catharsis.html

Rating Action: Moody's adjusts ratings of 9 European sovereigns to capture downside risks

Rating Action: Moody's adjusts ratings of 9 European sovereigns to capture downside risks
Global Credit Research - 13 Feb 2012

London, 13 February 2012 -- As anticipated in November 2011, Moody's Investors Service has today adjusted the sovereign debt ratings of selected EU countries in order to reflect their susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis and how these risks exacerbate the affected countries' own specific challenges.

Moody's actions can be summarised as follows:

- Austria: outlook on Aaa rating changed to negative

- France: outlook on Aaa rating changed to negative

- Italy: downgraded to A3 from A2, negative outlook

- Malta: downgraded to A3 from A2, negative outlook

- Portugal: downgraded to Ba3 from Ba2, negative outlook

- Slovakia: downgraded to A2 from A1, negative outlook

- Slovenia: downgraded to A2 from A1, negative outlook

- Spain: downgraded to A3 from A1, negative outlook

- United Kingdom: outlook on Aaa rating changed to negative

Please see the individual country specific statements below for more detailed information relating to the rating rationale and the sensitivity analysis for each affected sovereign issuer.

The implications of these actions for directly and indirectly related ratings will be reported through separate press releases.

http://www.moodys.com/research/Moodys-adjusts-ratings-of-9-European-sovereigns-to-capture-downside--PR_237716

S&P downgrades 34 Italian banks

S&P downgrades 34 Italian banks

(Reuters) - Rating agency Standard & Poor's downgraded 34 Italian banks on Friday, including heavyweights UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI), citing a reduced ability to roll over their wholesale debt and expected weak profitability.

The move follows S&P's downgrade of Italy's sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries.

In a statement, S&P said its so-called Banking Industry Country Risk Assessment had worsened to group 4 from group 3 -- out of 10 groups -- reflecting its more negative view on Italy's banking system.

"Italy's vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks' significantly diminished ability to roll over their wholesale debt," it said.

http://in.reuters.com/article/2012/02/10/italy-banks-idINDEE8190J120120210?type=economicNews

Greeks strike against IMF/EU austerity before crucial vote

Greeks strike against IMF/EU austerity before crucial vote

(Reuters) - Striking Greek workers denounced a new wave of austerity on Friday as a demand too far by the IMF and EU, but Finance Minister Evangelos Venizelos told the nation it had to decide within days whether to take the pain and stay in the euro or not.

Police fired teargas as black-masked protesters threw petrol bombs, stones and bottles in central Athens. The biggest police trade union said it would issue arrest warrants for Greece's international lenders for subverting democracy, and refused to "fight against our brothers."

As public rage seethed, the leader of the far-right LOAS party, the smallest of three parties backing Prime Minister Lucas Papademos, said he could not support the harsh austerity program.

http://www.reuters.com/article/2012/02/10/us-greece-idUSTRE8120HI20120210?feedType=RSS&feedName=topNews&rpc=22&sp=true

Greece takes step closer to default

Greece takes step closer to default
By Kerin Hope in Athens, Alex Barker in Brussels and Quentin Peel in Munich

Lucas Papademos, the Greek premier, failed to make party leaders accept harsh terms in return for a second €130bn bail-out, pushing Athens closer to a disorderly default as early as next month.

Greek television reported that Mr Papademos has set a deadline of midday on Monday for the three leaders to let him know whether they agree in principle with the proposed austerity measures, before he meets them again later in the day.

http://www.ft.com/intl/cms/s/0/cf397bb8-5003-11e1-8c9a-00144feabdc0.html#axzz1lbODxQp9

Lagarde calls for bigger eurozone firewall

Lagarde calls for bigger eurozone firewall
By Alan Beattie in Washington

The head of the International Monetary Fund said on Monday the eurozone needed a bigger firewall to prevent Italy and Spain sliding towards default, underlining Europe’s responsibility in solving its own sovereign debt crisis.

In a speech in Berlin, Christine Lagarde, IMF managing director, said that without a larger bail-out fund, fundamentally solvent countries like Italy and Spain could be forced into a financing crisis.

http://www.ft.com/intl/cms/s/0/52dcc61a-459f-11e1-93f1-00144feabdc0.html#axzz1kLMWe5p1

Ancient Greek sites could soon be available for rent

Ancient Greek sites could soon be available for rent
(AFP) – 7 hours ago
ATHENS — Available for rent: The Acropolis.

In a move bound to leave many Greeks and scholars aghast, Greece's culture ministry said Tuesday it will open up some of the debt-stricken country's most-cherished archaeological sites to advertising firms and other ventures.

The ministry says the move is a common-sense way of helping "facilitate" access to the country's ancient Greek ruins, and money generated would fund the upkeep and monitoring of sites. The first site to be opened would be the Acropolis.

http://www.google.com/hostednews/afp/article/ALeqM5jeUrA6jll-SsuqVTVwl6nmZRk4LA?docId=CNG.f8db7d69218339b9285abcf6567bb20c.471

Portugal moves into default territory

Portugal moves into default territory
By David Oakley
Portugal is trading in default territory after investors offloaded the country’s bonds this week amid rising fears of contagion. Worries are mounting that the private sector and Greece will fail to agree a restructuring package for Athens’ debt.

Many investors were also forced to sell Portuguese bonds after Standard & Poor’s downgraded the country to junk on Friday. Other funds sold Portuguese debt after Lisbon was removed from Citigroup’s European Bond Index, which these investors track, because of its fall to junk status.

http://www.ft.com/intl/cms/s/0/486cf342-411e-11e1-b521-00144feab49a.html#axzz1jla4qC8b

Germany rejects rescue fund boost, Greece under pressure

Germany rejects rescue fund boost, Greece under pressure

(Reuters) - Germany, the only major euro zone member to retain a top-notch credit rating, refused on Monday to consider boosting the bloc's rescue fund, while Greece was under pressure to urgently break a deadlock in debt swap talks if it is to avoid an unruly default.

European leaders vowed to press ahead with a fiscal pact for stricter budget discipline and hasten the launch of a permanent bailout fund for the 17-nation euro area, the European Stability Mechanism, in the light of Standard & Poor's move last Friday.

http://www.reuters.com/article/2012/01/16/us-eurozone-idUSTRE80E0RN20120116

Banks say no deal on Greek debt

Banks say no deal on Greek debt
BY: FROM CORRESPONDENTS IN WASHINGTON From: AFP October 27, 2011 9:39AM

THE group of major banks negotiating on a write-down of Greek sovereign debt say they have not reached a deal on its debt, including any new write-down.

"There has been no agreement on any Greek deal or a specific 'haircut'," said Charles Dallara, the head of the Institute of International Finance which is representing the banks in EU negotiations.

"We remain open to a dialogue in search of a voluntary agreement. There is no agreement on any element of a deal."

http://www.theaustralian.com.au/business/breaking-news/banks-say-no-deal-on-greek-debt/story-e6frg90f-1226178029025

Five European Nations to Be Downgraded by S&P: Report

Five European Nations to Be Downgraded by S&P: Report
Published: Friday, 13 Jan 2012 | 1:18 PM ET Text Size
By: Antonia van de Velde
CNBC Associate Editor

Standard & Poor's will cut the credit ratings of Italy, Spain and Portugal by two notches and downgrade France and Austria by one notch, a French newspaper said Friday, without citing its sources.

The newspaper, Les Echos, said that S&P would spare Germany, the Netherlands, Finland and Luxembourg in its long-awaited adjustment of euro zone sovereign ratings.

It said the announcement would come at around 4:30 pm ET, after the US stock market has closed.

"Remain alert tonight when U.S. markets close," one euro zone source told Reuters.

http://www.cnbc.com/id/4598545

IMF chief warns over 1930s-style threats

IMF chief warns over 1930s-style threats
By Hugh Carnegy in Paris, George Parker in London and Peter Spiegel in Brussels

The managing director of the International Monetary Fund has warned that the global economy faces the prospect of “economic retraction, rising protectionism, isolation and . . . what happened in the 30s [Depression]”, as European tensions again flared over suggestions in Paris that the UK’s credit rating should be downgraded before France’s.

“There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis that we see not only unfolding but escalating,” Christine Lagarde said in a speech at the US state department in Washington. “It is not a crisis that will be resolved by one group of countries taking action. It is going to be hopefully resolved by all countries, all regions, all categories of countries actually taking action.

http://www.ft.com/intl/cms/s/0/169f1364-2746-11e1-864f-00144feabdc0.html#axzz1gh8W3QWe

Euro Skids to 11-Month Low vs Dollar, Fed Weighs

Euro Skids to 11-Month Low vs Dollar, Fed Weighs
Published: Tuesday, 13 Dec 2011
By: Reuters

The euro dropped to an 11-month low against the dollar Tuesday, weighed down by fears of more rating downgrades in the euro zone, with the greenback supported by reduced expectations of further monetary easing following the Federal Reserve's less pessimistic assessment of the U.S. economy.

http://www.cnbc.com/id/45646153

S&P Puts 15 EU Nations on Negative Credit Watch

S&P Puts 15 EU Nations on Negative Credit Watch
Published: Monday, 5 Dec 2011 | 4:41 PM ET Text Size
By: AP with CNBC.com

Standard & Poor's put 15 European Union nations on watch for a possible downgrade of their credit ratings as the continent's debt crisis lingers.

The threat to downgrade the euro zone countries — including the ones that enjoy the stellar triple-A-rating — comes ahead of a crucial summit of EU leaders later this week.

The nations include Austria, Belgium, Estonia, Finland, France, Germany, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, the Solvak Republic, Slovenia and Spain.

http://www.cnbc.com/id/45557844

Anxious Greeks Emptying Their Bank Account

Anxious Greeks Emptying Their Bank Accounts
By Ferry Batzoglou in Athens

Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament.

With disarming honesty, the central banker explained to the lawmakers why the Greek economy isn't managing to recover from a recession that has gone on for three years now: "Our banking system lacks the scope to finance growth."

He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion -- by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October -- the biggest monthly outflow of funds since the start of the debt crisis in late 2009.

http://www.spiegel.de/international/europe/0,1518,802051,00.html