Financial Times
May 20, 2011
European leaders and policymakers tend to take a dim view of credit ratings agencies – those watchdogs of Anglo-Saxon capitalism who fell asleep on the job while Lehman Brothers and other banks were gorging themselves on toxic securities.
But they may want to read the latest report on Greece from Fitch, one of the largest ratings agencies. It suggests that Eurozone governments and the International Monetary Funds should be preparing to write another cheque to Athens. It also hints that any delay in paying Greece’s bondholders – an idea that has increasingly gained traction among policymakers – could have nasty consequences.
Fitch on Friday lowered Greece’s long-term credit rating one notch to B+, with a negative outlook, citing the scale of the challenge facing the country as it tries to implement a radical austerity programme to shore up its finances.
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