Greeks get backing from Germany… and another downgrade from S&P
GERMANY approved the second Greek bailout yesterday, although 17 MPs from the ruling parties insisted the measures will not help.
And the ratings agency Standard & Poor’s gave out its own dim view of Greece’s debt swap plans, following in Fitch’s footsteps to downgrade the country’s long-term debts.
S&P said that once the debt exchange is concluded, it will likely raise Greece’s sovereign credit rating from “selective default” to CCC – still deep in “junk” territory.
Economic conditions continued to deteriorate in France, with unemployment rising for the ninth consecutive month, while the European Financial Stability Facility (EFSF) was put on downgrade watch by S&P.
S&P cited the risk that some guarantors, including France, may face downgrades soon. The EFSF lost its top level triple-A rating just last month.
In France the number of jobseekers hit 2.863m in January – up 13,400 in the month.
Greece’s €130bn (£110bn) bailout package was approved in German parliament by a majority of 496 to 90, with several vocal ruling party members voting against the government.
A total of 304 ruling party members voted with the government, meaning Merkel fell short of the 311 votes needed for an absolute in the 620 parliament.
“It is economically wrong,” said Klaus-Peter Willsch, from Merkel’s CDU party who voted against the bailout arguing “Greece has a chance outside the euro, not in it.”