by Charles Forelle
Wall Street Journal
March 7, 2011
The favored Brussels buzzword these days is “relative calm.”
As in, “there is relative calm in financial markets, so let’s just take a few deep breaths on all this sovereign-debt-crisis stuff.” In this context, “relative calm” means “no one is, at this precise moment, engulfed in flames.”
Enter Moody’s with a match.
The ratings agency today downgraded Greece’s debt–already junk–by three notches, to the baleful level of B1. Moody’s gave three reasons. First: reforming Greece’s fiscal mess is hard. Second: Greece is having a tough time raising revenue.
And third, crucially: The EU hasn’t cleared up what sort of help it will provide after 2013, and it’s quite possible that bondholders could take a hit.
Greece lashed out. The downgrade is “incomprehensible” and “completely unjustified” and “does not reflect an objective and balanced assessment,” the country’s finance ministry said in a statement. Moody’s misses the progress Greece has made and “the Eurozone Member States’ unequivocal and united expression of continued support for the sovereigns that face difficulties in accessing capital markets,” Greece said.
Perhaps.
But maybe Greece missed Occasional Paper No. 77 of the European Commission’s Directorate-General for Economic and Financial Affairs. That’s the commission’s latest review of the Greek bailout and of Greece’s progress.
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