ATHENS (Reuters) – The financial agency Standard and Poor’s sent Monday an early warning to the new government of Greece, ensuring that if things go wrong, it can degrade the its sovereign credit rating even before the date scheduled for review on March 13.
The leftist SYRIZA won the elections on Sunday. Its candidate, Alexis Tsipras, agreed to form with small right-wing Independent Greeks a new coalition of hardline against austerity for its obligations towards the European Union.
Tsipras has promised to end budget cuts and tax increases that triggered unemployment and impoverished millions.
S & P raised the rating of Greece in September, but his manager Frank Gill said the uncertainty about the fight to keep its debt with the rest of the eurozone threatens recovery.
“Syriza was elected by promising to restructure sovereign debt, so the question is what kind of relief is willing to accept and what they are willing to agree with other EU states,” he told Reuters .
The S & amp expected soon; P to review Greece’s rating is 13 March. However, Gill warned that the agency could change “if we think something exceptional happened that has an important significance to the creditworthiness of a state”.
The negotiations with the rest of the eurozone and the International Monetary Fund will be complicated for Greece.
In addition to the nearly 10,000 million euros in debt payments faced this summer, its banks also rely on cheap finance and special exceptions of the European Central Bank (ECB).
So far, the Greek data suggest that fiscal performance is deteriorating, Gill said.
“What this for GDP and domestic demand means Again, (…) the data suggest that nothing good,” he added.
Gill says the outlook for economic stability is bleak. “Unfortunately, again is not good because you’re seeing withdrawals of deposits and the Bank of Greece stepping in to provide emergency liquidity assistance (Greek banks),” he said.
Compared to the size of its economy, Greece’s debt is by far the largest in Europe, above 170%, although it has a maturity profile longer term compared to countries like Italy or Spain .
However, if Greece is unable to access markets by high borrowing costs and dependence on its banks ECB Syriza may find you have limited leverage with creditors.
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