I was gone for a while due to technical problems, and during this time situation in Greece has been getting worse and worse. I am focusing on it so much because European financial system will start falling apart as soon as it is no longer capable of life-supporting Greece, and it indicates much more serious problems in European economy than officials are willing to admit.
- On June 14th, International Credit Rating Agency Standard and Poor’s lowered long-term credit rating of Greece to CCC from B. What does it mean? Right now there is a high probability that Greece will not be able to fulfill its monetary obligations to creditors. Additionally, in the world credit ranking Greece fell below Pakistan and go the last place. De facto, default is inevitable, but EU is still trying to drag this financial corpse into glorious United Europe future.
- Evangelos Venizelos, former minister of defence, became the new Greek finance minister. I guess it’s because it’s no longer safe to go to negotiations with EU without a tank. Would not help a lot though, since yields on Greek 2-year government bonds have already hit 30%.