Terror domino throughout Europe
The war between rating agencies and Europe ended today with the agencies’ victory, after yesterday’s “teeth grinding”...
For 20 months now, European politicians have been turning a blind eye at a time when the crisis is approaching countries such as Italy and Spain.
The result is a sharp rise in the wider European region (1000 units in Portgual, 1370 units in Greece) and the strong rise in Ireland, Spain and Italy.
Especially as to the latter, the borrowing cost of over 5% is literally scary, since the neighboring country’s debt is estimated at 2.5 trillion euro! Hence the 180 degree turn from European Commisioner, Mr. Olli Rehn, who reintroduced the idea of the Eurobond.
In a Europe torn apart through its own social fabric, the responses of European politicians are few and far between, hence the strong reaction of the markets and rating agencies.
On the other hand, the attack against agencies by politicians, including the one launched by Foreign Minister Mr. Lambrinidis, is rather inappropriate on the part of political individuals.
After the 2008 crisis, the rating agencies changed the bond procedures. Now that they are applying the rules, they are being blamed once again. It goes without saying that rating agencies are not “the best kids on the block”, and in cases like Iceland, they failed to predict that anything would happen.
Intense pressure on the Greek market
The Greek stock market opened with a sharp downward trend, but the greatest pressure began in the afternoon, when various European statements confused the markets.
The General Index closed at 1265.75 points and dropped by 1.75%. The Agricultural Bank collapsed by 15.6%. TNational Bank suffered a loss of 4.55%, while Alpha Bank and Piraeus Bank suffered losses over 4%.
Cypriot banks suffered losses of more than 3%. All transactions were reduced to 77 million euros, with 1.7-million-euro packages.
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