The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Greece spirals out of control

Rating gets junked by S&P; EU and IMF likely to provide fully-funded support but market increasingly believes a future default is inevitable

Greece grabbed the headlines back from Goldman Sachs yesterday when its credit rating was cut to below investment grade by Standard & Poor’s. Stock and bond markets took fright at the news, with the contagion spreading fast to other troubled European countries such as Spain and Portugal.

The pace of events surrounding Greece’s financial situation has reached staggering levels for a developed market country. Only last Friday, the Greek government activated a €30 billion lifeline that it was still negotiating with the EU, which was set to grow to €45 billion after a contribution from the IMF.

It was supposed to bring some calm to the market, but it had the opposite effect. The situation was further exacerbated yesterday when Standard & Poor’s cut their credit rating by three steps to BB+, and warned investors that should its debt need to be restructured, investors would likely recover between 30% and 50% of their initial investment.

That saw the Greek two-year yield rise to 23% today, from about 4.3% just a month ago, and Greece’s securities regulator today imposed a two-month ban on short sales on the Athens Stock Exchange.

With Greece now completely shut out of the bond markets, in reality the cut to junk status is redundant.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree