Standard & Poor’s Ratings Services on Tuesday lowered its outlook on Greece’s long-term credit rating, saying that the financially troubled nation will likely need further aid from its international lenders amid a worsening economy and delays implementing harsh austerity measures.
The ratings firm downgraded Greece’s long-term sovereign credit rating outlook to “negative” from “stable.” Its rating remained at “CCC,” well into “junk” status.
Greece’s economy is worsening, so it will likely need as much as 7 billion euros (US$8.7 billion) in additional financing, or 3.7 percent of its GDP, from the EU and the IMF, S&P said.
The move to lower the outlook reflects the possibility that S&P will downgrade Greece’s rating if the nation fails to get additional funding from other eurozone countries and the IMF.
The firm projects that Greece’s GDP will shrink by 10 or 11 percent over this year and next. The EU and IMF have assumed GDP will slow only between 4 percent and 5 percent during that period.
Greece has received two bailouts totaling 240 billion euros from other eurozone governments and the IMF after bond investors would no longer lend it money at affordable rates. In return for the money, Greece is supposed to cut its budget deficit and reform its economy. However, the economy has continued to contract and the new government of Greek Prime Minister Antonis Samaras has said it wants more time to meet some of the conditions.
Even so, S&P anticipates that Greece’s government will find it difficult to make the additional cuts required to satisfy the conditions to get its next slate of funding from the EU and IMF.
“We see the likelihood of shortfalls, owing to election-related delays in the implementation of budgetary consolidation measures for the current year, as well as the worsening trajectory of the Greek economy,” S&P said.
International bailout creditors are closely scrutinizing the country’s lagging austerity and reform program, and a negative report next month would likely lead to the vital rescue loans being halted.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks