Is Greece, “the most contagious nation in EU” ????

Greece is the most difficult member-state among the euro-zone nations, which has a different set of problems in comparison to other debt-ridden states, European Financial Stability Facility (EFSF).Terming the issue plaguing Greece as not that of liquidity but that of solvency, “Greece in the end has solvency problem, while all other nations have liquidity problem”.”The most difficult state we have is Greece, for several reasons. Greece has the most difficult fundamentals; economic situation was most serious, debt level was the highest, deficit was the highest, loss of competitiveness was the largest. So, they threw up the most difficult situation.”

Also blamed the Greek authorities for submitting false economic data at the timing of joining the 17-member monetary union. The political system in Greece is not delivering as in any other country. Ireland, Portugal and Spain had changed their governments in the last 18 months with a mandate to implement reforms and the Opposition is cooperating as well.Calling for stiffer remedies to tackle the Greek crisis, they are putting more than 100 billion euro for Greece, which is not needed for other countries. So, very special solutions are needed for them…Despite the adjustments Greece has taken in the last two years, there still remain a lot to be done”.Many of the 17-member euro-zone nations are facing a sovereign debt crisis with higher debt to GDP ratio, creating a downward spiral in growth, which is currently affecting the global financial system at large.

 

Greece “CCC” rating: S&P

Ratings agency Standard & Poor’s on Tuesday revised Greece’s outlook to negative, saying the debt-ridden euro zone country could need more help from its international creditors.Following delays in implementing budgetary consolidation measures and a worsening Greek economy, Greece is likely to require additional financing for 2012 under the EU/International Monetary Fund (IMF) program, and here comes the revised outlook on the long-term ratings on Greece to negative, reflecting the possibility of a downgrade if Greece fails to secure the next disbursement of the EU/IMF Program.

Greece has made progress in finding budget cuts needed to continue its bailout program, but international inspectors said this week that they will return in September to see if the remaining work is done.Greece has pledged a series of fiscal and reform measures worth 11.5 billion euros to convince international lenders to keep Athens hooked to a 130 billion euro lifeline and avoid bankruptcy.Inspectors from the IMF, the European Commission and the European Central Bank – known as the troika – concluded a visit to Greece on Sunday saying the talks with the new coalition government were productive.The likelihood of shortfalls, owing to election-related delays in the implementation of budgetary consolidation measures for the current year, as well as the worsening trajectory of the Greek economy.The ratings agency said it sees the Greek economy shrinking by 10 percent to 11 percent, cumulatively, during 2012-2013. S&P also affirmed Greece’s CCC rating, which is already well in speculative territory.Moody’s Investors Service rates Greece C, and Fitch rates the country CCC.

 

Greece & Iran tensions over crude prices

Despite recent gains, oil has fallen sharply this month with Brent down more than 12 percent. The front-month Brent contract is off about 16 percent from this year’s high above $128 reached at the beginning of March.Large speculators in crude oil futures and options markets have cut net long positions this month, easing back on assets deemed risky. Exchange data on Monday showed Brent net longs have been trimmed for three consecutive weeks. Investors say a key risk for the oil market is tension over Iran’s nuclear programme, which Washington and its allies believe is designed to produce an atomic weapon.A dispute between Iran and the West intensified over the weekend after Tehran refused to allow the International Atomic Energy Agency (IAEA) to visit a nuclear site suspected of being used to develop nuclear weapons.

Oil rose above $107 per barrel on Monday as fears of a euro zone break-up receded, but Middle East oil supply worries resurfaced after minimal progress in talks over Iran’s nuclear program. Fears of a war in the Gulf that could threaten global oil supplies have returned after world powers failed to convince Iran last week to halt its most sensitive nuclear work.Tension between Iran and the West remains high ahead of more talks in Moscow next month to try to end the stand-off.The latest Greek opinion polls are being seen as a positive and a lack of progress in the Iranian talks have also helped lift the market