GERMANY’S AAA credit rating was cut to ‘negative’ by ratings agency Moody’s yesterday, the first step towards a downgrade.
The agency acted after a a collapse of share prices was triggered by the yields for 10 year Spanish debt rising to 7.6%, causing Spain to issue repeated denials that were not believed, that it would need a Greek style bail out, but on a massive 450bn euro scale.
Moody’s said the German economy is now at risk from the expected Greek exit from the euro, as well as from the need to stop Spain collapsing, tasks that could break the German banking system.
Moody’s predicted that Greece leaving the eurozone ‘would set off a chain of financial sector shocks’.
Greece’s economy is being assessed by representatives of the ‘Troika’ – the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission – who arrived in Athens yesterday.
Reports over the weekend suggested that the Troika plans to refuse calls for further aid.
On Monday, a European Commission spokesman said the Troika would not be in a position to issue its report on the Greek economy until September and would therefore not be able to release the final 31.5bn euro instalment of bailout money until then.
That leaves Greece in a huge hole, with a 3.8bn euro debt repayment to the ECB due on 20 August.
In Athens on Monday evening over 5,000 workers and youth took part in a big and defiant rally and march in central Athens in solidarity with the steel workers whose strike is now in its ninth month.
Large contingents of workers from several industrial and service trades unions participated.
Throughout the march they chanted anti-government slogans; the most popular being ‘Nine months strike – Victory to the steel workers!’
As workers gathered for the rally the Athens stock exchange crashed by 7.1 per cent in line with the European markets.
The president of the construction trade union Yiannis Tasioulas spoke at the rally bringing solidarity greetings.
The main speaker was the president of the workers at the Hellenic Steel plant Yiorghos Sifonios.
He said that despite the riot police raid on the steel pickets last Friday the strike goes on with the same demands plus another one, that the riot police must be withdrawn from the plant.
On Monday afternoon riot police attacked strikers once again outside the Hellenic Steel plant as management and scabs tried to load scrap iron on lorries.
Another meeting has been set up for this Friday between the steel strikers and the Hellenic Steel management at the Labour Ministry.
Last week while negotiations were taking place the riot police attacked the pickets.
The Stalinist KKE (Greek Communist Party) parliamentary deputies have been asking ‘all parliamentary parties’ to pressure the government for a compromise instead of calling on the working class to take up strike action.
The KKE is dominating the steel workers’ trade union.
On Monday Alexis Tsipras, the leader of the Coalition of the Radical left (SYRIZA), condemned the riot police attack on steel workers but said nothing at all about the steel workers’ strike.
A delegation of the Greek Trotskyists of the Revolutionary Marxist League RML) took part in the rally and march distributing their leaflet headed ‘Steel workers must not fight alone – GSEE [Greek TUC} must call an indefinite general strike for the victory of the steel workers’ strike’.