Second bailout delays a real threat to Greece

International credit rating agency Moody’s warned that delays in concluding a second review of the bailout programme for Greece was credit negative for the country’s banks since it put at risk their restructuring programmes.

The warning was published in the agency’s Credit Outlook weekly report released on Monday and added that a timely implementation of Greek support programme was of crucial importance for economic growth in the period 2017-2019 and to gradually restore depositors' and investors' confidence in the country and its banking system.

Meanwhile the European Commissioner for Economic and Financial Affairs Pierre Moscovici on Monday in an effort to assuage concerns of the delay, repeated his conviction that Athens and the European institutions were "not far" from being able to conclude the second review of Greece's adjustment programme.

Moscovici said the European Commission wants to work with Greek authorities for a conclusion of the second review as soon as possible and desires a resolution of the debt issue. He also noted that Greece was "a source of concern" for the Commission, which was doing its utmost to keep the country in the Eurozone.

The credit rating agency noted that a delay in concluding a second review was focusing on Greece's disagreement to legislate new fiscal measures for the period after August 2018, when a third economic adjustment programme ends. This raised the danger of abandoning banks' strategic planning, as the crisis-hit economy was possible to be negatively affected by a possible freeze in new investments and a credit crunch in the market, Moody's said.

"Such a scenario could place banks into a more vulnerable position ahead of a new round of stress tests to be conducted by ECB in 2018, significantly raising risks for creditors and depositors," Moody's noted.