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Moody’s downgrades Greece on beginning of Lent-What a great sense of humor!

The guys working at the rating agency Moody’s must have an extra ordinary sense of humor. On the Greek Orthodox Holiday “Clean Monday” marking the beginning of the Lent and the fasting before Eastern,  the Moody’s decided to enforce believers or not to go into a strict diet on the perspective of a further downgrade – most probably from “Junk” to  what? Into “Chips” or “Confetti”? The stab in Greece’s back triggered an outrage in the government but Papa IMF rushed to support the poor, but hard working country 🙂

Moody’s Investors Service  lowered Greece’s credit rating by three notches, from Ba1 to B1,  and kept its negative outlook. Further it signaled it could cut the rating even further, dragging the country’s debt deeper into junk-grade territory.

Moody’s acknowledged progress that Greece has made in fiscal consolidation and structural reforms but warned that the changes needed to stabilize Greece’s debts remain “very ambitious” and face “significant implementation risks”. (wallstreetjournal )

Moody’s downgrade caused outrage in the Greek government and prompted an angry statement by the Greek Finance Ministry that described the downgrade as “completely unjustified”. 

The timing and size of downgrade are incomprehensible and they raise serious questions. Moody’s downgrade ignores the euro zone’s support to countries with debt problems. It demonstrates that rating agencies’ lack of accountability.and show the need for tighter regulation of rating agencies.

At the session of Monday’s informal cabinet meeting,  the Finance Ministry proposed tighter regulations for rating agencies. An idea prime minister George Papandreou should forward to French president Nicholas Sarkozy during their meeting upcoming Thursday.

In the shadow of Moody’s downgrade the Greek government will auction 26-Week Treasury Bills on March 8 in book entry form, with maturity 9 September 2011, according to an announcement.

Public Debt Management Agency said on Friday that the amount to be auctioned is EUR 1,250mn, with settlement date on March 11. (capital.gr )

Meanwhile International Monetary Fund rushed to support of Greece and to save its own prestige.

“We are confident that we will succeed, that the Greek debt is sustainable, and therefore our program will be successful,” IMF European Director Antonio Borges. (reuters)

Borges urged patience as Greece implements an IMF-EU supported program. “These are not programs that deliver miracles in a few months” he said.

Greece has recieved an IMF/EU/ECB bailout program worth EUR 110 billion and on a strict diet full of austerity measures.

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