Moody’s: Delays in concluding Greece’s bailout program review are “Credit Negative”
- Written by E.Tsiliopoulos
Moody’s in its credit outlook, published on Tuesday considers the delays in concluding the current bailout programme’s review as credit negative for Greece because they increase the risk of a new liquidity squeeze in the economy and prevent any discussion of debt relief, which will weigh on economic confidence.
Moreover, as per the rating agency, political uncertainty is again on the rise, as the governing coalition of Syriza - Anel holds only a three-seat majority in the 300-seat parliament, and could face difficulties in passing the legislation for the required social security reforms and tax increases.
As Moody’s notes, the centre-right opposition party New Democracy (ND), restructured under its new leader Kyriakos Mitsotakis, is now leading in opinion polls and could seek to force new elections. Moreover, Greece’s programme review has gradually become entangled with both the EU’s refugee crisis, with Greece hosting more than 50k refugees, and the UK’s June 23 referendum on EU membership, the latter of which threatens to delay Greece’s bailout package review until after June.
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