Cyprus downgraded further
International credit rating agency Fitch has downgraded Cyprus a couple more notches into junk status amid concerns that the government's support for the country's troubled banks could cost more than previously thought.
The agency cut its rating on Cyprus to B from BB - and warned of more possible downgrades as it predicted that the banks' recapitalisation needs could be as high as 10 billion euros.
That would push the size of the rescue package that Cyprus is trying to finalise with the other 16 European Union countries which use the euro and the International Monetary Fund to more than 17 billion euros (£14.3 billion).
That, Fitch said today, would drive the country's debt load to more than 140% of its annual gross domestic product, 20 percentage points more than the agency previously estimated.
Popular Stories
Money has to serve, not to rule - Pope
Video - Soldier hacked to death in...
Update 2 - Three missing women found...
Update 2: Gunman held in Rome police...
'Dramatic' flooding in Passau
Tornado chaos hits Italy
New video - Ship rams harbour control...
Italy confirms first case of new virus
Angelina reveals double mastectomy
In Discussion
Video - Soldier hacked to death in...
More than 1,200 migrants reach Italy by...
Clashes as France approves gay marriages
Men tie first gay knot in France
Anti-gay marriage march held in Paris
Shock over London killing
Rival protesters face off in London
Mother of Cleveland kidnapping suspect...
Israel says Google's "Palestine" page...
30 Comments
Post comment
Please sign in or create your Account to post comments.
C Muscat
Jan 26th, 19:09
Nispera li ma jigrilniex l istess jekk l-inglizi johorgu mill eu. Anzi Dalli ha hsieb xi haga bil-quddiem meta ova ihajjar in-nies igibu flushom mill-UK.
Richard Caruana
Jan 26th, 18:19
Where's CyprusJoe and his economics?
Thanks for Gonzi calling his bluff and not taking his advice.
Carmel J. Caruana
Jan 26th, 19:22
The irony of it all is that the EU troika with their haircut of Greek debt destroyed Cypriot banks. I am pro-EU but in this particular case the EU has been very bad for Cyprus.
Peter Murray
Jan 26th, 11:04
Who is actually taking any notice of these credit rating agencies-especially when the ratings go south -so to speak?It looks as though the UK will soon lose their Triple A rating -following the USA and France-but what impact will this actually have and why do we have or even need these agencies?
Charles Cremona
Jan 26th, 11:19
The impact for Cyprus is devastating as they cannot borrow money from the markets anymore, in fact the island is now surviving on people's savings and pension funds and the way things are going it may go bankrupt anytime unless it gets an EU bailout which is proving difficult as its Socialist president is refusing to sell national entities as being demanded by the troika.
George Calleja
Jan 26th, 13:01
How daft can you be. When Fitch lowered Malta's rating with only one notch, hell broke out and labour leaning supporters, like you, lambasted the government. Now you're asking who is actually taking any notice of these credit rating agencies. Do you know where you stand? Good job Gonzi did not take Joseph.s advice!!!!!
Francis Saliba M.D.
Jan 26th, 13:05
Serious people take notice of these credit ratings, including the Labour Party but only when they can be twisted to imply less than perfect performance by the Nationalist Party.
Carmel J. Caruana
Jan 26th, 18:12
This Joseph Muscat and Cyprus thing is just PN spin. The economic crisis in Cyprus arose simply because Cypriot banks for historical reasons invested heavily in Greece. When Greece went down it pulled Cyprus down with it. Nothing to do with wrong economic models. If our banks had invested in Greece, Ireland or Spain we would have the same problem. Cypr has better hospitals, hotels, ... than us.
Carmel J. Caruana
Jan 26th, 18:13
The irony of it all is that the EU troika with their haircut of Greek debt destroyed Cypriot banks. I am pro-EU but in this particular case the EU has been very bad for Cyprus.
Pippo de Marco
Jan 27th, 01:14
Peter.
Countries are like people. Those with good credit ratings pay less to borrow money than those with poor ratings. This is especially important if we seek to borrow on the world markets.
Francis Saliba M.D.
Jan 27th, 16:55
@CarmelJCaruana yesteraday at 18:12
It is not NP spin. It only seems so to you because you and the LP have become dizzy trying to deny the undeniable, namely that Muscat undoubtedly recommended that Malta should imitate Cyprus.
Carmel J. Caruana
Jan 30th, 04:34
Dr Saliba, when the PN tries to give the impression that Cyprus went down because of choosing a bad economic model it is PN spin (euphemism for 'blatant lie'). By the way dont associate me with any party please. I am an independent thinker with a mind of my own who happens to think that at this point in time I prefer the devil I DONT know to the one I DO.
Michael Cremona
Jan 26th, 10:34
more from the Cypriots:
With all the big guns of the zone facing problems, the only countries with significant positive growth were Malta, Estonia and Slovakia,
http://www.cyprus-mail.com/economy/eurozone-growth-recession-and-inflation/20130120
Michael Cremona
Jan 26th, 10:33
and:
the time required for the activities related to the registration and operation of international companies should be considerably reduced through full computerized procedures, taking into account systems implemented in other countries such as Malta and the United Kingdom.
http://famagusta-gazette.com/former-cyprus-president-calls-for-measures-to-strengthen-financial-sector-p17855-69.htm
Julian Borg
Jan 26th, 10:27
This is what awaits us under an MLP government. We will be committed to a €600 million expenditure for an unwanted power station to save ourselves 50 cents a day - if at all. This is no joke!
Peter Murray
Jan 26th, 10:45
Whose laughing?As when one circus leaves town another one simply rolls in and all of them have performing clowns!
Carmel J. Caruana
Jan 26th, 15:02
The irony of it all is that the troika with their haircut of Greek debt destroyed Cypriot banks. I am pro-EU but in this particular case the EU has been very bad for Cyprus. Do you blame Cypriots for not wanting to sell their assets?
Carmel J. Caruana
Jan 26th, 15:02
Reality check for PN - NOT being able to control public debt for 5 years is NOT FINANZI FIS-SOD; 5000 million Euro debt is NOT FINANZI FIS-SOD; Let's hope you haven't ruined us irreversibly as the country has never had an experience of such a high level of public debt before.
Francis Saliba M.D.
Jan 26th, 10:22
There but for the grace of God, and the wisdom of the Nationalist Party, would Malta have gone had Joseph Muscat's foolish advice been taken in a fit of collective madness by government.
Carmel J. Caruana
Jan 26th, 15:04
Reality check for PN - NOT being able to control public debt for 5 years is NOT FINANZI FIS-SOD; 5000 million Euro debt is NOT FINANZI FIS-SOD; Let's hope you haven't ruined us irreversibly as the country has never had an experience of such a high level of public debt before.
Francis Saliba M.D.
Jan 26th, 18:29
@CarmelJCaruana.
Take a primer's course in economics and learn that the economies of most highly developed countries are run on intelligent public debt dependent relying on the country's credit, that Malta's per capita public debt is much below that of much more important thriving countries and that Malta's public debt is internal with its own people who consider their government credit-worthy.
Francis Saliba M.D.
Jan 26th, 10:19
There but for the grace of God, and the wisdom of the Nationalist Party, would Malta have gone had Joseph Muscat's foolish advice been taken in a fit of collective madness by government.
M Farrugia
Jan 26th, 10:01
What does Cyprus Joe has to say about this? I guess there will be no press conferences on a blue background this time.
Peter Murray
Jan 26th, 10:43
lest we forget Paddy Gonzi's former role model was none other than the Celtic Tiger ,,,IRELAND -look how that aspiration to emulate turned out
Francis Saliba M.D.
Jan 26th, 13:08
The Nationalist Party government when to follow Ireland as a role model and when not to do so. That is why Malta is doing so well when compared to all other members of the European Union.
Edgar Gatt
Jan 26th, 13:13
Agree Peter, but again Dr.Gonzi did not follow Ireland and went his way with very favourable results.
HENRY FENECH AZZOPARDI
Jan 26th, 14:42
@ Perter Murray
Whatever you say holds no water because Gonzi managed to steer Malta out of austerity measure to make ends meet and now Cyprus is trying to copy Malta for survival. Malta is on the right track may we remain so and prospor even better in years to come.
Muscat is keeping the budget, he is also copying much of the PN electoral manifesto. The only poroblem is the energy proposal.
Carmel J. Caruana
Jan 26th, 15:06
This Joseph Muscat and Cyprus thing is just PN spin. The economic crisis in Cyprus arose simply because Cypriot banks for historical reasons invested heavily in Greece. When Greece went down it pulled Cyprus down with it. Nothing to do with wrong economic models. If our banks had invested in Greece, Ireland or Spain we would have the same problem. Cypr has better hospitals, hotels, ... than us.
HENRY FENECH AZZOPARDI
Jan 26th, 19:46
@ Carmel J. Caruana
It was never a GonziPN spin. It was a Muscat declaration and at that time Cyprus was the same Cyprus of today. Banks or no banks Muscat wanted us to imitate Cyprus. Was it another GonziPN spin when Muscat was against EU membership, Joining the Eurozone?
His energy proposal is another gaff. Back out of the issue and pl have more chance to win the election.
Wilfred Camilleri
Jan 26th, 21:05
@ Carmel J. Caruana This Joseph Muscat and Cyprus thing is not just PN spin. It's Malta's future if Muscat and his voodo economics gets hold of Malta's economy!
Please choose the reason of your report below: