Greek economy under pressure
Shares on the Greek stock market fell by 6% today amid concerns that the country is struggling under a mountain of debt and may be unable to repay liabilities in the short term. The catalyst for the fall in the Greek stock market was the announcement by credit rating agency Fitch that it has cut the rating on Greece's debt to a ten-year low. There are concerns about the short, medium and long-term future of the Greek economy after the revelation that debt is estimated at around 125% of the country's gross domestic product.
This is a very difficult situation for the Greek economy and the Greek government because ultimately the more they struggle to raise finance and cut costs the more focus is placed upon the country's dire economic outlook. The economy is currently in a stranglehold and the government is unable to wave a magic wand and rectify what is actually a worsening situation. So what next?
At the moment the Greek government is able to use its own government debt as collateral for further borrowings from the ECB but if the situation gets any worse, even this basic backdrop may be withdrawn. At some point one of the worldwide or European financial institutions will need to step in with some kind of rescue plan.
Share this..
Related stories
Financialadvice.co.uk New Years Summary- What happened?
29/12/2014 So it’s finally arrived, the end of 2014. Again, it seems to have absolutely flown by! It feels like only yesterday we were saying goodbye to 2013, and now, in only a short time, we will be welcoming in 2015. We’ve decided to have a look back at some of the biggest financial events this year, and how they have had an effect on us all, and how they may impact on the future....
Read MoreRoyal Bank of Scotland confirms deal to escape toxic asset scheme
The Royal Bank of Scotland has today confirmed a three-way agreement between the UK government, the company and the EU commission with regards to the Royal Bank of Scotland's participation in the asset protection scheme. This comes only hours after the EU commission effectively rewrote the UK government's initial agreement and confirmed that Royal Bank of Scotland would need to take on a "first lo...
Read MoreHas Alistair Darling sold out to the EU?
There are serious concerns today the Alistair Darling has sold out to the EU with news that three new regulators will be created primarily to monitor and regulate the UK financial markets. They will be charged with monitoring the banking sector, insurance sector and all investment firms within Europe although London is by far and away the main focus of this increase in regulation. Despite Alist...
Read MoreCadbury under pressure from Kraft Foods
JP Morgan, the influential US investment bank, has today issued a report which would suggest that Cadbury is possibly trading below the company's official guidance figures. If true, and nothing has been confirmed by Cadbury, this would be a bitter blow for the management which is currently attempting to escape the clutches of US counterpart Kraft Foods.
A proposed £10.2 billion tak...
Concern and confusion over National Express
Reports in the weekend press suggested that the Cosmen family, the largest single investors in National Express, were so disturbed by the developments at the company that the chairman Jorge Cosmen was in fact looking to resign. The family has today issued a statement suggesting that no resignation is imminent although it is well-known that the family would rather the company reopened negotiations...
Read More