S&p cut Greece and the EFSF rating

Tuesday (February 28) and the early morning, the s&p will Greece "CC" long-term sovereign credit rating and "C" short-term sovereign credit rating down to a "selective default" (SD), maintain the Greek foreign currency to recover the "4" rating.

S&p says, cut the Greek sovereign credit rating for the Greek government on February 23, 2012 in some series of sovereign bond documents to back way to join collective action terms. Standard &poor's thought, to join this clause, the terms of the original bond produces major change, constitute the bad debt restructuring.

But then the earlier in the session, news that 2012 Germany or will be a stable mechanism to Europe (ESM) to make 11 billion euros of capital contribution, the other half of ESM of Germany in 2013 to make contribution may be. The mood of the dead market, warm, the euro/dollar immediately rebound and recover 1.3400 pass.

Seven days before memories, also be Tuesday (February 21) the city in the morning, for the euro zone of the Greek agreement reached relief, a rating agency fitch ratings will Greece default rating of local and long-term issuer (IDR) by the CCC down to C, short-term foreign currency ratings still for C. Fitch ratings says, the Greek C rating show that Greece could default very recent.

Barclays (Barclays) in New York AroopChatterjee says, "the Greek rescue agreement reached by promoting, and optimism rose last week, but now the market back to reality.

Good in bad, make market slightly feeling of our comfort, Monday, February 27) new city tray, the German parliament voted to total 130 billion euros ($174 billion) of the second Greek aid program. Congress passed the plan means, in the later this week is scheduled for a meeting of European Union leaders summit, German chancellor Angela Merkel (Angela Merkel) will be to the latest Greek aid program says support. This summit will be formally approved the Greek aid program.

While Europe debt problem is not limited to Greece. The Spanish economy minister LuisdeGuindos in accept media interviews confirmed that in economic growth prospects are deteriorating to realize the goal of previous increased difficulties, it has failed to achieve its 2011 budget deficit target. The 2011 budget deficit equal to account for 2011 gross domestic product (GDP), 8.51% of the failed to reach the goal of 6%. This highlights, to achieve a 2012 budget deficit GDP4.4 % of the target, Spain will of challenge.

Also the city tray, the s&p will also European financial stability fund (SFSF) rating outlook from developing down to negative, confirm the AA + / A-1 + rating. This means that a change standard &poor's ruled out the next two years the fund ratings upgrades to AA + possible.

S&p also pointed out, the long-term rating outlook EFSF was down to negative reflect France and Austria rating outlook for negative. If standard &poor's will for AAA rating or AA + EFSF guarantee of countries (Germany, France, the Netherlands, Austria, Finland or Luxembourg) long-term sovereign rating down to AA + the following words, so in no extra credit support standard &poor's will cut the EFSF rating.

The European central bank (ECB) this week three (February 29) will publish a new three-year refinancing operation (LTRO), balance sheet has increased, investors remain cautious. The European central bank LTRO results this week is likely to be decided whether the euro can continue to last week's rise.

The first round LTRO created a miracle. At a stroke, adequate fund bank no longer worry extension of bonds pay expire. Round the threat of bankruptcy bank disastrous lifted, Italian and Spanish government bond yields began to drop, previously once with buyers don't buy his and rising dramatically. At the same time the enterprise and the stock market confidence up.

But for the LTRO amount, the market is expected to produce differences, minimum for 200 billion euros expected to top 1 trillion euro dollars. Analysts said, "if the loan amount not less than 400 billion euros, for the European banking market confidence will get to boost, the euro will also get support." And Citigroup (Citigroup) analysts said, "if the amount of the funds is too high (close to 1 trillion euros), the European central bank's assets will increase, so the scale of euro exchange rate may withstand the pressure."

The euro zone finance ministers Thursday (3 January) will be in the European Union (EuropeanUnion) leaders summit in Brussels before the meeting. Greek and is expected to leaders will discuss with the private sector to creditors of bonds writedowns agreement are discussed.