Greece, a danger for the Euro and Eurozone?
The last week have put a lot of focus on Greece and the Euro. Below are some possible outcomes of the crisis in Greece.
Increasing Budget deficit
How far can the statistics for Greece’s public finances be trusted? The Bank of Greece says the budget deficit in 2009 will be 12.7%. Two months ago the previous government said it would be 6.7%. The latest numbers reveal a debt level of 121 % higher then GDP. However, the true numbers might not be discovered
yet, in the highly corrupt country of Greece.
Even lower credit ratings
Both Standard & Poor’s and Moody’s have now lowered Greece credits ratings. Greece have now the lowest credit ratings in EU. But it’s still higher then many investors had expected. After the news of the adjusted credit ratings for Greece, the Euro fell 0,5 % against the dollar.
Higher risk for Greek bonds
There might be better investments right now. The greek bond market is probably not where sensible investors are going right now.
IMF might help Greece
A possible outcome is that IMF might come to help Greece. If they do, you could expect they would impose austerity measures on Greece, in exchange for debt repayment.
The Euro have taken a hit after the latest problems around Greek. Lets see how it proceeds.