Questions about the crisis in the euro area
"Greece can she leave the euro area?
"What is the role of rating agencies?
"Greece can go bankrupt?
"Is there a risk of contagion to the rest of the euro area?
"What risks for European banks?
"Why do they attack the markets as Portugal?
"Does France have any reason to worry?
• Greece can she leave the euro area?
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The want it – despite the financial risks – Greece would have the greatest difficulty to get out of the eurozone for legal reasons. If a Member State may be expelled from the EU if it no longer meets the political criteria, this option is not provided by the Treaties for the euro area. This legal vacuum is subject to interpretation."It is inconceivable that a Member State legally so the euro area without retiring in parallel with the European Union," says Phoebus Athanassiou, legal adviser to the ECB. As for expulsion from the monetary union, it would be "virtually impossible from a legal standpoint, because it would amend the treaties unanimously, says he, in a research note. Angela Merkel had called in March to exclude the possibility of a country does not fulfill the conditions of membership of the single currency. Without revising the treaties, the option of expulsion would be "perhaps achievable through the back door" by establishing a de facto monetary union with two speeds. The emerging countries could keep the euro as parallel currency.But it is more of a possibility is more theoretical than practical, as the hazards are many.
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"Merkel should be able to exclude a country from the euro
• What is the role of rating agencies?
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Rating agencies – the number three in the world – are private and independent agencies that assign a score to countries or financial companies. Investors rely on this note to know the risk level of bonds they buy. Each agency to its own methodology. Standard & Poor's, for example, attributes the "AAA" rating to the best transmitters, then descends to "AA" and "A" and "BBB". Each time, these notes are accompanied by signs + or -.Then, the notes come down to "BB" and are then considered to reflect the level of obligations "rotten" … In general, the rating reflects the percentage probability that the issuer will default. Thus, an issuer rated triple AAA, like France, has 0% chance to fail in three years. An issuer 'BB', as is now Greece, 23.08% to fail within three years.
• Greece can go bankrupt?
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Photo credits: AFP