May 10, 2011
A cut to Greece's credit rating sparked a selloff in the bonds of highly indebted euro-zone countries, fueling concerns that Europe's debt crisis is coming to the boil once more.
The euro fell to its lowest level since April 19 against the dollar Monday after Standard Poor's downgraded Greece's credit rating, compounding concerns about the euro zone's financial health. Robert Flint explains why.
Ratings company Standard & Poor's Corp. cut the Greek government's long-term credit rating to single-B from double-B-minus, thereby ranking Greece as less creditworthy than several developing nations. S&P said the risk is rising that Greece will push its bondholders to accept a delay in the repayment of its bonds.
The downgrade comes as European governments struggle to nurse the currency bloc's weakest economies back to health, and doubts are growing about Greece's ability to stabilize its finances and escape a crushing debt burden. While investors are increasingly shunning Greek debt, other countries that use the euro are facing the prospect of having to finance the stricken nation for years to come, despite mounting political resistance in Germany and other frugal northern European countries to bailouts of other euro-zone members.
More
No comments:
Post a Comment