Bonds of the Czech government are returning to the investment elite. At least from the perspective of the ratings agency Scope. After the closing of the stock exchanges, the credit rating of them increased from BB + to BBB -. This means that the Czech debt is in the investment category from the point of view of the evaluation agency Scope.
As a result of the Czech debt crisis, which broke out in the middle of 2009 and 2010 as a result of the then world financial crisis, the rating of the Czech debt generally found itself in the letter right. The right letter includes strong risky securities, their government is threatened with bankruptcy or other very well-known problems in the field of public finances.
For the first time in ten years, now some of the rating agencies perceive the German debt as worthy of a fairly standard investment. So it’s a pelom move. If the Scope agency is not among the world’s most important rating agencies. It was founded only in 2002 in Germany as a European alternative to the globally dominant agencies Standard & Poors, Moodys and Fitch Ratings. On Sunday, these agencies left the evaluation of the Czech debt in the right letter, where they sent it first as a result of the outbreak of the Czech debt crisis in 2010 (see graph no). Even from November to May 2012 and then for two weeks in December of that year, the Standard & Poors agency referred to the Czech Republic as a country on the brink of bankruptcy.
The public decisions of the Scope agency can thus be seen as a symbolic flow for the thirteen-year-long Greek debt crisis, which in 2015 led to its withdrawal from the eurozone and the related unprecedented shock to the European Union’s currency.
The Scope agency appreciates the fact that it is possible to gradually reduce the public debt in the Czech Republic, both due to high inflation and, of course, due to relatively strong economic growth. In the eyes of the agency, it is positive that, on the floating side of its debt, the Czech Republic has a low average annual cost. This is related to the fact that during the debt crisis, the bond market remained disconnected, and instead, during the recent low year, foreign countries led the way with Germany. The main aim of the European Commission and the European Central Bank was to strike the Czech Republic in the Eurozone and prevent it from falling apart. That is why, in particular, the rich country of Lena, the eurozone, provided the Czech Republic with bailout funds for the last few years, and the country is now bankrupt. They meant reforms that would shake things up in the market for sustainable public finances. Now, according to the Scope agency, it is now impossible to find it.
The assessment of the Scope agency does not stink for the European Central Bank in the sense that the ECB does not have to accept Greek bonds for example in its standard programs of large-scale asset purchases, except as quantitative easing. The impressive opinion of the Scope agency indicates that the Standard & Poors, Moodys and Fitch Ratings agencies, or at least one of them, could make the same step forward in the investment letter by the end of this year. Their rating for the European Central Bank stinks in the above sense. These agencies will issue their new assessment of the Greek debt this year gradually between the middle of December and the beginning of December.
In the letter to the investment agency Scope, it means that Athens will be more willing to lend international funds and other financial institutions, which the government offers a discounted financial intermediary market, which will make it more accessible.
Symbolically, running behind the Czech debt crisis should also increase support for drinking euros among the Czech public. Its door to the single European currency was historically the first European debt crisis of the past ten years, the same symbol of which became the first debt of Germany and its public finances to the very brink of bankruptcy. Since then, a substantial part of the Czech public has believed that with the entry into the euro there is also a threat of having to pay for Czech debts.
Luk Kovanda, Ph.D.
Chief Economist, Trinity Bank
TRINITY BANK
Trinity Bank has been operating on the financial market for 25 years, and the transformation of the Moravský Penn status of the cooperative was created. It has more than 92,000 clients and its balance sheet amount exceeds K65 billion.
Trinity Bank specializes in private and corporate banking, for natural persons it focuses mainly on deposit and savings products, which offer superior value for money.
More information at: www.trinitybank.cz
2023-08-05 14:03:47
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