I would like to apologize from all Greek people. By the way, I would like to convey the sorrow I feel to credit rating agencies. I have not been disclaimed this fast before! Okay, you will consider my warning and take necessary actions; but why is the rush for! Now how will I visit Greece I have not been to except some islands?

On Monday, I wrote something about Greece though it was not my business. I dared to say "The state of affairs in Greece did not go unpunished... If this was the case for a developing country, we would 'expect a crisis sooner or later.' In short, the penalty imposed on Greece proves quite innocent."

But my purpose was, taking departure from the Greece case, to underline the asymmetry in the "punishment" behaviors of the market and to address an interesting subject in academic terms. I had no bad intentions against the Greek people. Yesterday, Fitch declared that the rating of Greece was cut to BBB+ and Standard and Poors announced on Monday that Greece was put in monitoring category meaning that the rating can be soon reduced from A-. On Tuesday, Athens Stock Exchange declined significantly. Interest rate on Greece government bonds, which were already high, furthered with the rise in the risk perception. As Bloomberg suggests, this rise (for instance the rise in the interest on two-year government bonds)  is the biggest rise since the data the global crisis actually burst with the bankruptcy of  Lehman.

Greece's credit rating is currently higher than that of Turkey. Fitch recently raised Turkey's rating to BB+. So, Greece is one level above Turkey. A reminder: ratio of Greece's public debt to GNP is around 110 percent. It is argued that even these days will be missed if no measure is taken. Ratio of budget deficit and current account deficit to national income is also quite high both being two-digit values. These three indicators for Turkey is reflect a much better picture than in Greece; even making a comparison is unfair. Aside from the credit rating, risk perception of the market is in line with this 'difference in quality'. Risk on the debt of Greek state is above that of Turkey.

The first morale of the story is; implementing a strong monetary policy, and having a strong currency as the implementation of strong monetary policy is almost certain and known to almost everyone, is a must but not sufficient to keep you away from trouble. Fiscal policy requires solemnity. If you are reluctant to act with solemnity, and if leads to a continuous rise in your debt as well as a high budget deficit; you eventually get into trouble.

The second morale of the story is: if interest rates in a country rise, blaming eyes shall not necessarily be directed to the central bank. Is European Central Bank responsible for the rise in interest rates on Greek state bonds? As far as we are concerned, rates fell continuously until May and then remained constant. Or did the central bank raise interest rates without letting the rest of the world know? So, what is the conclusion? Fiscal policy can be the main determinant of interest rates. Scholars blaming the Central Bank for implementing 'high interest  rate - low exchange rate'  policy until recently shall definitely dwell on the Greece case.

This commentary was published in Radikal daily on 10.12.2009