While the Greek financial crisis which is beginning to fan out over Europe has put a damper on Israel's economy, the Jewish State is faring better than many.
On April 27, the Standard and Poor's rating agency downgraded Greek bonds to the status of "junk", lower than investment level, on fears that the Mediterranean country would default on international debt repayments. Greece's debts are estimated at around 300 billion euros.
The Tel Aviv 25 Index fell 1.12% Wednesday, with the Tel Aviv 100 falling 1.19%. Though it was a bad day at Israel's Exchange, Tel Aviv coped better than many major global markets. Wall Street fell 1.9% on Standard and Poor's announcement, Paris 2.16%, Madrid 2.72%, and Tokyo 2.57%.
On April 27, Standard and Poor's also significantly downgraded Portugese stock, causing Lisbon's exchange to plummet 5.56%.
The European Union will hold an emergency summit to discuss a bailout of Greece and potentially Portugal, in order to thwart an EU-wide economic catastrophe. Upcoming elections in the largest euro-using country, Germany, may throw a spanner in the works, as a massive bailout payment to Greece is a political bone of contention.
Currently, a bailout agreement of 45 billion euros is estimated, with analysts wondering whether that will be enough to keep Greece – and the rest of the EU – away from financial disaster.
On Wednesday, the shekel-dollar exchange rate rose 0.34% to NIS 3.7477 to the dollar, but the shekel-euro exchange rate fell 0.48% to NIS 4.9479 to the euro.