Greek Debt Price Soars as Moody's Cuts Credit Rating Below Egypt
THE DAILY TELEGRAPH: The Greek government has reacted angrily to Moody's decision to cut the country's credit rating below that of Egypt, a move that prompted investors to dump the debt of other struggling European economies.

The country's debt was lowered to B1 from Ba1, as the ratings agency warned that Greece faces a shortfall in tax revenue and huge challenges in reforming state-owned companies and its costly healthcare system.

"The sheer magnitude of the task is becoming ever more apparent," said Sarah Carlson, an analyst at Moody's.

The Greek Finance Ministry yesterday described Moody's move as "totally unjustfied".

"Having completely missed the build-up of risk that led to the global financial crisis in 2008, the rating agencies are now competing with each other to be the first to identify risks that will lead to the next crisis," it said. Continue reading and comment >>> Richard Blackden | Monday, March 07, 2011

Tensions Rise in Greece as Austerity Measures Backfire
Photograph: Spiegel Online Internation
SPIEGEL ONLINE INTERNATIONAL: The austerity measures that were supposed to fix Greece's problems are dragging down the country's economy. Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70 percent in some places. Frustrated workers are threatening to strike back.

The feast of the Assumption of Mary on Aug. 15 is the high point of summer in the Greek Orthodox world. Here in one of the country's many churches, believers pray to the Virgin for mercy, with many of them falling to their knees.

The newspaper Ta Nea has recommended that the Greek government adopt the very same approach -- the country's leaders have to hope that Mary comes up with a miracle to save Greece from a serious crisis, the paper writes. Without divine intervention, the newspaper suggested, it will be a difficult autumn for the Mediterranean state.

This dire prognosis comes even despite Athens' massive efforts to sort out the country's finances. The government's draconian austerity measures have managed to reduce the country's budget deficit by an almost unbelievable 39.7 percent, after previous governments had squandered tax money and falsified statistics for years. The measures have reduced government spending by a total of 10 percent, 4.5 percent more than the EU and International Monetary Fund (IMF) had required.

The problem is that the austerity measures have in the meantime affected every aspect of the country's economy. Purchasing power is dropping, consumption is taking a nosedive and the number of bankruptcies and unemployed are on the rise. The country's gross domestic product shrank by 1.5 percent in the second quarter of this year. Tax revenue, desperately needed in order to consolidate the national finances, has dropped off. A mixture of fear, hopelessness and anger is brewing in Greek society. >>> Corinna Jessen in Athens | Wednesday, August 18, 2010

Greek Economy Shrinks, Jobless Rate Jumps
THE TELEGRAPH: The Greek economy shrank by 1.5pc in the second quarter and the unemployment rate jumped to 12pc, pointing to a deepening recession as the country battles a debt crisis.

A shopper walks by a shop offering discounts of up to 70pc due to the economic crisis. Photo: The Telegraph
A fall in investment and a "significant" reduction in public consumption had dampened overall output, the national statistics office said.

The disappointing official GDP figures pushed up the cost of protecting Greek government debt against default on Thursday. It now costs €795,000 a year to insure an exposure of €10m of Greek government bonds, according to CDS monitor Markit.

Greece is in a deep economic crisis after being forced to adopt harsh austerity measures to rebalance its public finances following a €110bn (£90bn) rescue from the EU and IMF. >>> | Thursday, August 12, 2010