Letter: State’s finances

by Shelton on February 28th, 2015

filed under Finances

The state of Illinois#x2019; finances are a disgrace.

For years, we kept sending the same incompetents to Springfield and let them run the state into the ground.

Then we seemed to realize the critical position of our finances and elected someone who stated, quite boldly, he was going to get our finances under control.

Now, when he tries to do what he promised and why we elected him, we have people crying about cuts.

Let#x2019;s be frank: If you want the state#x2019;s financial situation fixed, where do you suggest the cuts be made?

Everyone seems to think someone else should pay the fiddler. Folks, like the old saying goes, it#x2019;s time to fish or cut bait.

Bill McElman

Lake in the Hills

Family Finances: Opportunity cost (dun dun dun)

by Shelton on February 27th, 2015

filed under Finances

Family Finances: Opportunity cost (dun dun dun)

You remember opportunity cost from economics class. Its the idea that the cost of your decision is the thing you didnt choose. We know your kids’ value can’t be measure in dollars, but here’s an interesting way to look at their impact on your finances.

February 26, 2015; 9:15 AM bull; by Amanda Gibson

1MDB, a case of mismanagement … or worse?

by Shelton on February 27th, 2015

filed under House Loan

YOURSAY lsquo;Wheres the money in Caymans? Maybe it does not exist anymore.

1MDB seeks another one-month loan extension

Sali Tambap: 1Malaysia Development Berhads (1MDB) future looks really bleak. If, as according to this report, that it has to sell its stake in order to pay its debt every month, then eventually it will have nothing left when all its properties are sold.

Secondly, it seems like a desperate measure of a person who is about to go bankrupt, when it (1MDB) sells its property (Edra Global Energy Bhd) back to the same person, T Ananda Krishnan, who sold the property to them two years ago.

If the company is viable and making profit, why the need to delay payment of debt? From a laypersons perspective, it is as if one is unable to pay the monthly installment of a car that one has purchased.

Only that this involved huge amount of money, RM2 billion, thus the gravity of it.

Wg321: I thought it is a simple exercise. The new CEO of 1MDB will bring back to Malaysia the money (RM7 billion) from the Cayman Islands; and pay its debt of RM2 billion to Maybank, RHB and other lenders before the end of January.

If the money has been brought back to Malaysia, why is 1MDB not paying its debts to the lenders and asked for extension instead? Something is wrong somewhere. Where is the money in Caymans? Maybe it does not exist anymore.

Chinese businessmen will never want to do business with such a company. They will say got money, dont want to pay.

To the Chinese, trust is very important in doing business. But how to trust 1MDB? It has very bad business practices. It never wants to build up trust and confidence with its customers and lenders.

Deputy Finance Minister Ahmad Maslan is very proud of the new CEO of 1MDB, claiming that he is a Muslim. What is the use? He cannot perform such a simple job.

Mosquitobrain: Indeed, Ahmad Maslan has announced on national TV that the offshore investments has brought in some returns. So why 1MDB still requires extension for another month?

Umnosyaitan: The issue now is that 1MDB is seeking yet another loan extension as it is unable to repay RM2 billion loan that has already been extended three times.

Under Bank Negaras own rules, 1MDBs consistent failure to repay the RM2 billion syndicated short-term bridging loan means that the lending banks should classify the loan as a non-performing loans (NPLs) because the company has been unable to repay its contractual loan commitments.

However, Bank Negara has time and time again bent the rules in 1MDBs favour by allowing the banks to grant extension after extension in a valiant effort to prevent the loan from sinking to the classified loans category.

Kit P: A corporation, just as with a person, is very likely facing financial trouble if it has to urgently sell assets to settle a scheduled debt repayment. Do you ever find that you have to sell your assets to meet scheduled house loan or car loan repayment?

Of course, 1MDB deals in billions of ringgit, but the principles of financial stability are not that different.

Princess_Bee: Dont worry, 1MDB would be able to meet its financial commitments and that it would continue to add and unlock values of its assets, and generate a respectable return.

Be patient because there may be some constraints that cannot be avoided by 1MDB. The most important thing is 1MDBs repayment is being made.

Anonymous #19098644: One issue stands above all. Under Malaysias banking laws and guidelines issued by Bank Negara Malaysia (BNM), it is compulsory for a corporate entity to get the written approval of the central bank before it can proceed to raise and accept a foreign loan of such magnitude.

Did or did not 1MDB get approval and did or did not BNM give written approval? If so, have the conditions of the approval been met?

If the answer is lsquo;no to any of this three obvious questions then, who is accountable and why has no action been taken for breach of Malaysian laws and banking regulations?

What does BNM governor Zeti Akhtar Aziz mean when she says that she doesnt comment on individual entities? Has BNM been negligent in allowing the laws of the country to be flouted? If so, shouldnt Zeti and BNM clarify and take the appropriate action?

Truth: Najib, what a shame. Is this how a government sovereign fund operates? No money to pay loan, and keep applying for extension?

Should the banks give other local businesses extension to pay their loans too since our government-funded entity is also doing so?

What happened to the money repatriated from Caymans? Why revalue land and post profits, but yet no money to pay loan? Is this how Najib run the countrys finances?

Now they are relying on tycoon Ananda Krishnan to save 1MDB.

Anonymous_1404357714: Find out who the bank lenders are for the 1MDB. Apply for credit card (or a personal loan) from these banks.

Default the monthly repayment for three consecutive months by asking for extension each time. See if there is any mercy from them.

If not, ask why 1MDB can (with billions of ringgit involved) do so, while they go after those owing them peanuts.

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Debt Consolidation USA Shares Valuable Tips To Curb Spending In Sale Events

by Shelton on February 26th, 2015

filed under Debt Consolidation

Debt Consolidation USA recently shared in an article how consumers can help their budget especially in the face of sale events. The article aims to help and educate consumers when deciding if a sale is enough justification to spend.

Philadelphia, PA (PRWEB) February 07, 2015

Debt Consolidation USA recently shared in a published article how consumers can help their budget especially in the face of sale events. The article titled “Tips To Make Smart Spending Decisions During Sale Events” aims to help and educate consumers when deciding if a sale is enough justification to spend.

The article starts off by pointing out that if spending goes beyond the budget, it is a good indication that a consumer is not making smart spending decisions. This is not an acceptable practice because overspending can put a person’s financial goal in a plateau or even worse, on a spiral down to unmanageable debt.

There is no excuse for people to spend more than what their budget allows except only during emergencies like someone getting hospitalized or an emergency repair at home that cannot be postponed like a busted heating system during winter. A nice suit or a flashy red pair of stilettos are not considered an emergency.

To prevent overspending especially during sale events, the article shares some tips starting off by asking consumers think through the purchases. They need to be able to understand if the item on sale is something they really need. This is especially true if the purchase is not within budget.

The article also shares that consumers need to know if the sale is a one-time basis or if it will be recurring every month especially during paydays. If it is something that happens often, consumers can just try to budget the item in the next sale event. By that time if it is something that they really need, they can buy it.

Another tip that the article points out is understanding if the purchase of the item is more important their saving goals. An unexpected hit in the budget because of an unplanned purchase in a sale event can have negative effects in person’s long term saving goals.To read the full article, click this link: http://www.debtconsolidationusa.com/personal-finance/tips-to-make-smart-spending-decisions-during-sale-events.html

For the original version on PRWeb visit: http://www.prweb.com/releases/financially_managing/sale_events/prweb12494326.htm

Contrary to Obama, federal finances aren’t hunky-dory

by Shelton on February 26th, 2015

filed under Finances

According to President Barack Obama, the financial condition of the federal government is hunky-dory.

The deficit is under control. Nothing to worry about. Nows the time to increase taxes on corporations and the rich to fund additional government benefits for the middle class.

Is Obama right, are the finances of the federal government essentially fixed? Not by a long shot.

Obama bases his sanguine assessment on the fact that, under his budget projections for the next 10 years, annual deficits remain less than 3 percent of GDP, a level economists generally regard as sustainable.

But that shouldnt be the end of the analysis.

Under Obamas budget, the annual deficit over the next decade averages around $570 billion. The trend is upwards over time, so thats a warning sign in itself.

Im not one who thinks that the federal government should be completely on a pay-as-you-go basis. Each year, the federal government buys roughly $250 billion in major physical assets. Stuff that has a long life, such as buildings and airplanes. Financing such purchases and spreading the cost to include future taxpayers who will benefit from them is sensible.

That means, however, that Obama proposes borrowing more than $300 billion a year not to finance capital purchases but to pay for current operating expenditures. Thats imprudent and has cumulative consequences.

Right now, the federal government can borrow seemingly without limit at very low interest rates. That presumably wont last forever and, to their credit, Obamas budgeteers dont assume that it will. Obamas budget assumes a return to normal interest rates over the 10-year planning horizon.

The cumulative effect of continuing to borrow significantly to pay for current operating expenses and higher interest rates should be a cause for considerable concern, if not alarm.

Obamas budget projects that the annual interest cost on the national debt will increase from about $230 billion today to a jaw-dropping $785 billion ten years from now. That puts a squeeze on the rest of the budget and makes the federal governments finances highly vulnerable to interest rate swings.

Obamas budget proposes that federal spending increase by an average of 5 percent a year over the next decade. Federal spending would increase faster than population and inflation, and faster than the economy.

Prior to Obama, federal revenues averaged about 18 percent of GDP and federal spending 20 percent. Obama proposes to increase federal revenues to about 19.5 percent of GDP and spending to 22 percent. Not to respond to emergency economic conditions, but as the new norm.

Obamas budgeteers claim that this is necessary to accommodate the increased cost of retiring baby boomers, and there is merit in the claim. Despite proposing a dizzying array of new domestic spending initiatives, the increased spending under Obamas budget does mostly come from entitlements.

But Obamas budget proposes to use up a lot of fiscal headroom without fixing entitlements. And the day of reckoning is getting nearer.

The Social Security disability trust fund will run out of IOUs to cash in 2016 and be unable to pay what is owed in benefits. The same thing is projected for the Medicare hospitalization trust fund in 2030 and the Social Security retirement fund in 2034. Benefit cuts, if nothing is done, will be about 20 percent.

Obama proposes that the retirement fund cover the disability fund deficit. Other than that, he proposes nothing on entitlement reform.

I dont like Obamas proposed tax increases. But if he were proposing them to pay for entitlement benefits, he might have an argument. Increasing taxes to expand domestic programs without fixing entitlements, however, is irresponsible. As is crimping future borrowing capacity by leaving the accumulated national debt, including what is owed to the entitlement accounts, close to 100 percent of GDP.

Even if there isnt the political will to tackle entitlement reform now, the fiscal headroom has to be built to do it when it can no longer be avoided.

If the increase in federal spending were modestly restrained to 4 percent a year rather than Obamas 5 percent, borrowing to cover operating expenses would be eliminated over the course of the decade without Obamas tax increases. Fiscal headroom to tackle entitlement reform would be created.

That ought to be possible.

Reach Robb at robert.robb@arizonarepublic.com.

Debt Management Credit Counseling Publishes Debt Consolidation Video

by Shelton on February 25th, 2015

filed under Debt Consolidation

Educational video on debt consolidation plan published by Debt Management Credit Counseling Corp (http://www.dmcconline.org), a nonprofit credit counseling organization (DMCC). Short animated video provides consumers a quick overview of a valuable repayment option to eliminate credit card and other unsecured debts.

Lighthouse Point, FL (PRWEB) February 13, 2015

Debt Management Credit Counseling Corp http://www.dmcconline.org, a nonprofit credit counseling organization (DMCC), announced today the publication of a new educational video on debt management plans. Consumers struggling to repay unsecured debts, such as credit cards, payday loans, collection accounts and medical bills, are encouraged to view the video to get a quick easy understanding of how a debt management plan may help them. The video can be found on the DMCC website at http://www.dmcccorp.org/edu/debtreliefvideos/.

The debt management plan video is the latest in a series of short animated videos published by DMCC to educate consumers on various financial matters, including credit, debt relief, student loans and identity theft. All of the videos were designed by DMCC certified credit counselors to be just a few minutes in length and easy to understand. The debt management plan video provides consumers a quick two minute overview of this valuable repayment option, which is offered by creditors through accredited credit counseling agencies like DMCC. This video is a great way for consumers to get a quick understanding of how a debt management plan may help them, said Phil Heinemann, DMCC Executive Director. We encourage anyone struggling to repay credit cards and other unsecured debts to take a look before seeking other debt relief options.

Debt management plans to lower interest rates and monthly payments for unsecured debts, such as credit cards, payday loans, collection accounts and medical bills, are available through DMCC in most states. Monthly payments under debt management plans are consolidated, so consumers only need to make one monthly payment to DMCC, which is then distributed by DMCC to their creditors. In addition to providing affordable monthly payments, creditors participating in debt management plans typically stop their collection calls and past due fees. Consumers interested in a debt management plan quote should contact DMCC at 866-618-3328, Monday Thursday 9:00am 6:00pm and Friday 9:00am 3:00pm ET, or by completing an online application at http://www.dmcconline.org.

About Debt Management Credit Counseling Corp.

DMCC is a 501c3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers overextended with debt. Education is provided to consumers via seminars, workshops, a proprietary financial literacy program, and a vast array of online and printed materials. Personal counseling is provided to consumers to identify the best options for the repayment of their debt at no charge. DMCC is a US Department of Housing and Urban Development Approved Housing Counseling Agency, is approved by the US Department of Justice to provide bankruptcy counseling and education, and has an A+ rating with the Better Business Bureau.

For the original version on PRWeb visit: http://www.prweb.com/releases/debt_management/credit_counseling/prweb12515322.htm

Army Emergency Relief campaign kicks off

by Shelton on February 25th, 2015

filed under Debt Consolidation

Fort Leavenworths 2015 Army Emergency Relief Campaign kicked off Feb. 18 at the Frontier Conference Center. The campaign slogan is Making a Difference. Fort Leavenworths goal is to raise $90,000 during the campaign, which runs from March 1 to May 15.

Zach Stephens, 2015 AER campaign coordinator, shared the campaign goals at the kick-off event.

The objectives of the campaign are to educate the leaders and the Fort Leavenworth military community of the services AER provides, make 100 percent contact to those eligible to contribute to the campaign; and meet the established goal of $90,000 for the installation, Stephens said.

Fort Leavenworth raised $69,617 for AER last year, falling short of the 2014 campaign goal of $90,000, and distributed $315,325 in loans and $54,885 in grants to a total of 264 clients.

Jack Walker, deputy to the Garrison commander, spoke at the event. He explained where the Fort Leavenworth donations came from last year.

About 39 percent of (the 2014 contribution funds) were active-duty personnel. Fifty-seven percent of them were retirees looking after the current soldiers and their needs. Other (donations) amounted to about 4 percent, Walker said.

Incorporated as a private nonprofit organization in 1942, AERs mission is to help soldiers and their family members by providing emergency financial assistance. Emergencies include house fires, vehicle repairs, medical or funeral expenses, cranial helmets, car seats and food, among others. Loans do not cover ordinary vacation, legal expenses, debt consolidation or other nonessentials. AER also has two scholarship programs for spouses and dependents pursuing undergraduate degrees. (See AER release for more information.)

Theres probably not a person in the room who hasnt at some time or another run into a few financial difficulties and was looking for someplace to turn to be able to take care of that need, Walker said.

Assistance is provided through interest-free loans or grants, if repayment of a loan will cause undue hardship. Partial loans and grants are also offered. There is no dollar limit to the amount of the loan funds are made available to commanders based on valid needs.

For the most part, if there is a true need they are going to get taken care of, Walker said.

Those eligible for assistance are active-duty soldiers and their family members, retirees and their family members, widows and orphans of soldiers who died while on active duty or after retirement, and National Guard and Reserve soldiers on Title 10 orders for more than 30 consecutive days and their family members.

As a nonprofit organization, AER receives no money from the government. Funds come from loan repayments, investments, unsolicited contributions and donations from soldiers, civilian employees, family members and retirees. Unit representatives or a key person collect donations from active-duty soldiers and turn them in to campaign headquarters. Retirees are contacted by AER headquarters via mail and send donations in to headquarters.

Maplewood man indicted by grand jury for fraud, theft

by Shelton on February 25th, 2015

filed under Debt Consolidation

Maplewood man indicted by grand jury for fraud, theft

By: editor

MAPLEWOOD, NJ — Acting Attorney General John J. Hoffman announced Wednesday, Feb. 11, that the operator of a Maplewood debt adjustment firm was indicted for allegedly defrauding customers by promising them reductions in their monthly bills and then stealing their money in a Ponzi scheme.

The Division of Criminal Justice Financial and Computer Crimes Bureau obtained a state grand jury indictment charging Germain Theodore, 34, of Maplewood on Wednesday, Feb. 11, with second-degree theft by failure to make required disposition of property received. It is alleged that Theodore recruited customers for his purported bill-payment and debt-consolidation business, TGC Movement Inc., by claiming that he could reduce their monthly bills by 35 percent. Theodore allegedly told clients that if they paid 65 percent of their bills to TGC, plus a fee, TGC would arrange for their bills to be paid in full. It is alleged that, instead, Theodore quickly stopped paying bills for the clients and stole their payments.

From May 2013 through his arrest on Oct. 15, 2013, Theodore allegedly stole more than $250,000 from more than 200 clients. The Attorney General’s Office commenced a civil investigation through the Division of Consumer Affairs in September 2013 after receiving complaints from numerous customers of TGC. The Division of Consumer Affairs subsequently referred the matter to the Division of Criminal Justice for a criminal investigation. The Essex County Prosecutor’s Office and the Maplewood Police Department assisted in the criminal investigation.

After his arrest, Theodore posted bail and opened a business in Jersey City called Save My Future, through which he allegedly engaged in the same type of fraud.

In August 2014, he was rearrested on a criminal complaint charging him with theft in connection with numerous customer complaints related to Save My Future. The Division of Criminal Justice is continuing to investigate the alleged thefts in Jersey City, with assistance from the Jersey City Police and the Hudson County Prosecutor’s Office.

“Theodore is the worst kind of con artist, because he allegedly stole from people who already were struggling financially,” said Hoffman. “We allege that he gained the trust of his vulnerable victims by promising them a way out of their financial woes, but then he ruthlessly betrayed them, leaving them even deeper in debt.”

“Theodore’s greed knew no bounds. While free on bail on charges that he stole from hundreds of clients in Maplewood, he allegedly had the audacity to launch the same type of scheme in Jersey City to defraud even more victims,” said Director Elie Honig of the Division of Criminal Justice. “We’re continuing our investigation in Jersey City to ensure that Theodore is held accountable for all of his alleged crimes.”

The investigation revealed that Theodore allegedly advertised TGC as a bill-payment and debt-reduction service through its offices on Springfield Avenue in Maplewood. Clients were reportedly told that if they submitted their unpaid bills to TGC, along with payment for 65 percent of the outstanding balance of those bills, TGC would remit payment in full to the client’s creditors. TGC also charged an 8-percent fee to the client. Theodore and other employees of TGC variously represented to prospective clients that either funding from a government grant program or private investors paid the remaining 35 percent of the clients’ bills.

Typically, TGC initially paid the full amount promised, in order to gain the trust of the client. In most cases, the client’s bills were paid in full after the client’s first and second visits to TGC. Thereafter, however, TGC allegedly did not make the promised payments and the client’s bills went unpaid, even though TGC continued to receive 65 percent of the outstanding balance and the 8-percent fee from the client. It is alleged that Theodore operated TGC as a classic Ponzi scheme, using money from new clients to pay the first bills submitted by earlier clients.

Second-degree charges carry a sentence of five to 10 years in state prison and a criminal fine of up to $150,000. The indictment is merely an accusation and the defendant is presumed innocent until proven guilty.

The indictment was handed up to Superior Court Judge Mary C. Jacobson in Mercer County, who assigned the case to Essex County, where Theodore will be ordered to appear in court for arraignment at a later date.

Should you refinance your mortgage?

by Shelton on February 24th, 2015

filed under Debt Consolidation

Yahoo Finance is answering your most-searched finance questions of the year. The fourth most-searched questions was: Should I refinance my mortgage?

There are a few solid reasons to refinance your mortage. If interest rates are lower than they were when you first financed, you may want to move fast to lock in that lower rate.

[Get the Latest Market Data and News with the Yahoo Finance App]

A lot of people also refinance their loan by cashing in on equity in their house in order to pay down debts — basically like a debt consolidation loan.

Another reason to refinance is if you’re looking to change the terms of your loan. For example, you might want to switch from a 30-year loan to a 15-year loan or from an adjustable rate mortgage to a fixed rate mortgage.

But before you pull the trigger, don’t forget that a new mortgage also means new closing costs. Sit down with a financial planner to figure out how many months of lower mortgage payments it will take to recoup those costs before you refinance.

Have a personal finance question you’d like answered? Drop us a line at yfmoneymailbag@yahoo.com.

More of your top finance questions answered:

Number 5: Can you buy a house with bad credit?

Number 6: Should you buy Facebook stock?

Number 7: Why are gas prices going down?

Number 8: Who is the richest man in the world?

Number 9: Is social security taxable?

Number 10: What is Bitcoin and how does it work?

Moody’s places Greece’s Caa1 govt bond rating on review for downgrade

by Shelton on February 24th, 2015

filed under Debt Consolidation

Moodys Investors Service has today placed Greeces Caa1 government bond rating on review for downgrade. The short-term rating remains unaffected at Not Prime (NP).

The key driver for the review for downgrade is the high level of uncertainty over the outcome of the negotiations between Greece and its official creditors over the terms of Greeces support programmer. The outcome could potentially have negative implications for Greeces ability to meet its funding and liquidity needs and for the probability of default on marketable securities. Moodys government bond rating applies to marketable securities only.

Rationale for Review for Downgrade

Moodys review for downgrade will assess the likely outcome of the negotiations recently initiated between the newly-elected Greek government and the euro area authorities, as represented by the European Commission (EC) and European Central Bank (ECB). In particular, it will assess the Greek governments ability to secure its medium term financing capability through an extension or amendment to its current support programmer with the EC, which would likely also allow Greek banks to maintain access to ECB financing facilities.

Greeces new government has made clear its desire to materially change the terms of the existing support programmer with its official creditors. In Moodys view, there is considerable uncertainty regarding the outcome of the ensuing negotiations, and the ability of the two sides to reach an agreement which secures Greeces financing position.

The Greek government has been vocal about its political mandate to roll back austerity measures, reduce primary budget surplus targets and negotiate a debt reduction agreement with its official creditors. However, other euro area governments are likely to resist such demands given their policy stance in recent years and because further debt relief could undermine debt consolidation efforts elsewhere in the euro area.

If the Greek government is unable to secure an agreement with official creditors in the next few weeks, the probability of default on debt issued to the private sector would rise sharply. Without the assurance of an official-creditor programmer, Greece will find it very difficult to meet its near-term financing needs against the background of very low liquidity buffers.

Delays to official-sector disbursements of around EUR7.2 billion that were originally due last year have exacerbated Greeces liquidity and funding challenges. In 2015, Greece has to repay around EUR16 billion in long-term debt, roll over outstanding T-bills of EUR14.6 billion and make around EUR4 billion in interest payments to private and official creditors. The first large repayment of EUR3.5 billion is due on 20 July, followed by another repayment for EUR3.2 billion on 20 August, both for marketable securities held by the ECB.

The first half of the year also requires the Greek government to roll over around EUR11.6 billion of T-bills, and Moodys sees ECB support for the Greek banking sector as a key determinant of its ability to achieve the rollover. The ability of Greeces domestic banks to continue to play the role of principal buyers of T-bills will rest on continued access to ECB facilities. The decision of the ECB on 4 February to lift the waiver of minimum credit rating requirements for marketable instruments issued or guaranteed by the Government of Greece is noteworthy. Although the ECB renewed access to the Emergency Liquidity Assistance (ELA), Moodys believes that future access is likely to be contingent on i) Greece remaining within a formal programmer; and ii) the ECB concluding that the Greek banks remain solvent and thus retaining access to ELA provided through the Bank of Greece.

While the recent Asset Quality review by the ECB concluded that the Greek banks were in fact solvent, the prospect of an increase in risk of a default by the Greek government could cause the ECB to revise that view. Were it to do so, Greek banks could lose access to refinancing facilities, which will impair the governments ability to roll over maturing T-bills.

In addition, Greece will need to depend on additional net T-bill issuance to meet its budgetary needs, but Greeces agreement with its official creditors limits T-bill issuance to a maximum outstanding amount of EUR15 billion, which it is very close to reaching already. Moodys notes that raising this cap will also require official creditor approval.

Even if an agreement is reached between Greece and the official creditors, Moodys will assess the likely impact of the current stand-off, and any consequent changes to the Greek governments fiscal and economic policy, on the countrys growth prospects and public sector debt trajectory in the coming years. Even though Greeces general government debt-to-GDP ratio is the second-highest in Moodys rated universe, 80% of the debt is held by official creditors (including the ECB) and therefore benefits from low interest rates and long maturities. Consequently, the debt affordability ratio — interest to revenues — has reduced to 9.2% in 2014 from 16.6% in 2011 and the average maturity of the debt is long, at around 20 years.

However, the countrys very weak recovery, estimated by Moodys at 0.6% real economic growth in 2014 after a six-year contraction, and its inability to attract private investment, remain key credit weaknesses. Greeces economic outlook faces risks to the downside in the event of continued uncertainty with respect to funding and liquidity, combined with the heightened political risks and the uncertain relationship with official creditors.

Moodys would consider downgrading Greeces Caa1 government bond ratings were it to conclude, as a result of the review, that an agreement with official creditors is not likely to be reached in time to enable the government to repay its creditors who hold debt on commercial terms; and that the likelihood of a significant deceleration or even reversal in the implementation of the adjustment programmer would further hinder Greeces growth prospects.

Although not likely in the near term, Moodys could consider upgrading Greeces government bond rating in the event of an increase in the pace of fiscal consolidation and structural reforms; continued economic growth and sustained large primary surpluses, both of which would support a continued decline in debt levels; and more certainty and visibility on future external financial support and the political environment.

Prompted by the factors described above, the publication of this credit rating action occurs on a date that deviates from the previously scheduled release date in the sovereign release calendar, published on www.moodys.com.

  • GDP per capita (PPP basis, US$): 25,126 (2013 Actual) (also known as Per Capita Income)
  • Real GDP growth (% change): -3.9% (2013 Actual) (also known as GDP Growth)
  • Inflation Rate (CPI, % change Dec/Dec): -2.6% (2014 Actual)
  • Gen. Gov. Financial Balance/GDP: -12.2%(2013 Actual) (also known as Fiscal Balance)
  • Current Account Balance/GDP: 0.6% (2013 Actual) (also known as External Balance)
  • External debt/GDP: [not available]
  • Level of economic development: Low level of economic resilience
  • Default history: At least one default event (on bonds and/or loans) has been recorded since 1983.

On 03 February 2015, a rating committee was called to discuss the rating of the Greece, Government of. The main points raised during the discussion were: The issuer has become increasingly susceptible to event risks as there is increased uncertainty over whether Greeces new government will come to an agreement with official creditors in time to meet its near-term funding and liquidity needs.