Greece is running out of friends. Standard & Poor’s does not like what it sees in this Grexit game of chicken and political shell game that Greece is playing with Europe. After word that Greece will not be making its debt payments to the International Monetary Fund on June 30, Standard & Poor’s has downgraded Greece.
Greece is seen being in commercial default on debt payments in general, with an exit of the euro is now 50%.
S&P said that its interpretation of Greece’s decision to hold a referendum on official creditor proposals as yet another indication that the government under Tsipras will continue to prioritize the nation’s domestic politics over real financial and economic stability, over commercial debt payments and over the eurozone membership.
S&P is lowering its long-term ratings to CCC- for Greece, down from CCC. S&P is further affirming the C short-term ratings. Greece was also put with a negative outlook, indicating that S&P could further downgrade Greece’s long-term ratings to SD over the next six months in the event of a distressed exchange or nonpayment of the nation’s commercial debt, including treasury bills.
S&P said:
In our view, the probability of Greece exiting the eurozone is now about 50%. … Also, we believe that, absent unanticipated favorable changes in Greece’s circumstances, a commercial default is inevitable within the next six months.
Again, how do you repossess national assets … or a country?
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