WORLD
Moody`s: Greek euro exit threatens currency`s existence
Baku, June 9 (AZERTAC). Moody`s Investors Service said on Friday that a Greek exit from the euro could pose a threat to the currency`s existence.
In addition, developments in Spain`s banking sector that may require a European rescue package have negative credit rating implications for the sovereign, Moody`s said in a statement.
"Were Greece to leave the euro, posing a threat to the euro`s continued existence, we would need to review all euro area sovereign ratings, including those of the Aaa nations," the firm said.
A Greek euro zone exit would particularly affect the sovereign ratings of Cyprus, Portugal, Ireland, Italy and Spain, Moody`s said.
Spain is rated A3 with a negative outlook by Moody`s, putting it one notch above the BBB-plus rating with a negative outlook from Standard & Poor`s. Fitch Ratings on Thursday slashed Spain`s credit rating by three notches to BBB with a negative outlook, putting it two notches below Moody`s.
Moody`s said Spain`s banking sector crisis is largely specific to the country itself and would not pose a major source of contagion to other euro area countries.
However, Italy, much like Spain, shares a growing funding reliance on the European Central Bank through its banks.
"The European Central Bank`s role as a temporary liquidity provider cannot resolve tensions in the funding markets over the medium term, and has not done so," Moody`s said in its report.