Fitch downgrades 5 Greek banks, economy at crucial point

Following the move by Fitch to downgrade Greece’s long term rating to CCC from B+. on Wednesday, it made a comeback today and further downgraded five Greek banks. Specifically the international rating agency downgraded the long-term credit rating of the National Bank, the Piraeus Bank, the Alpha Bank, ATEbank and Eurobank at ‘B-‘ from a previous ‘B +’, maintaining a negative outlook. 

Meanwhile, Greek Finance Minister Evangelos Venizelos urged Greeks to heed only “reliable information” given by the government and warned opposition parties and especially main opposition New Democracy (ND) leader Antonis Samaras to “avoid playing with words” at this crucial time. 
Venizelos repeated his call to ND to strive for national unity on the difficult measures that need to be enforced, noting that “a simple act of consensus could reduce the burden for citizens”. “It is a decision that is already taken; the new programme will go into effect so that everything will be finished before September 15, at which time Greece must receive the sixth tranche – or what is now the first tranche of the new programme. “We took the political decision that the borrowing needs of the country will be covered and the political decision that the financing and liquidity needs of the Greek system will be covered. Playing with words at such crucial times must stop,” he said.
The minister stressed that a battle was underway to stabilise and control the situation. Nonetheless, Venizelos’ view that our country could agree to giving “product” guarantees to the Troika so that the issue of the Greek debt can be resolved, are giving a new perspective on talks about the Greek debt. According to the Greek press today, this is going to be a very tough negotiation between the Greek government and the Troika, and the result will be imprinted in the loan contract that Greece needs to sign in late September. Sources say that the guarantees the Troika will ask for are very painful and Venizelos will request the approval of the contract from 180 MPs, whereas government spokesman Mosialos insists that his government will only ask for 151 votes.
On his part, main opposition New Democracy (ND) party leader Antonis Samaras, addressing a Political Committee’s session, said that “the word default is forbidden in our vocabulary,” adding that “its mere utterance may have disastrous results and function like a self-fulfilled prophecy. And this is valid in all its versions, and in English.” 
Samaras said that Prime Minister George Papandreou said that it (the word default) is mentioned by those wanting to gain from the destruction of the country. “Now that his vice president is using it, what does Mr. Papandreou have to say?” the ND leader wondered and explained that “it will stop fluidity to the country’s banks.” 
He went on to say that “selective default has never taken place in an EU country” and that “prudence necessitates that we see the next step and not to adopt the lesser evil, that may lead to the bigger evil. In addition, we must reject whatever jeopardises the supply with fluidity of the Greek economy.” 
Samaras proposed the eurobond as the alternative solution, or the repurchasing of bonds, while he said that the participation of private individuals in lending Greece will be disastrous. 
“The issuing of eurobonds is the only healthy solution on the part of the EU, but Europe must overcome certain obsessions,” Samaras said and predicted that Europe will be led there, but “the question is for Greece to emerge benefitted.”
Combined Reports

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