OBA says debt crisis warning is disturbing
The One Bermuda Alliance said a warning from a local investment advisory firm that Bermuda is in line to join the list of countries whose members are facing severe debt crises as disturbing.
However, the Progressive Labour Party suggested the report was biased and the timing highly suspicious.
Anchor Investment Management warned on Friday that that Bermudas sovereign debt risk a measure of how well it is able to service its $1.4 billion government debt — is worse than most industrial nations.
It also said the Island is next in line to join Spain, Portugal, Ireland, Iceland, Greece and Spain on the list of countries facing severe debt crises.
The company reduced its forecast for Bermudas gross domestic product (GDP) and predicted the Island will remain in recession through 2013.
Responding to the news, Shadow Finance Minister Bob Richards said: Anchor Investment Managements warning Friday that Bermuda faces a debt crisis stands as one more reason Bermudians should vote for change.
The Governments massive debt — now $1.45 billion and growing — continues to drain strength from the economy and its ability to help people in need. Mondays election is the opportunity for people to say this is not good enough and that they want change for jobs and security, and a more responsible approach to the debt situation.
Mr Richards added: The fact that the Government has been completely silent on this very serious issue tells us that they offer Bermuda nothing but more of the same — and more of the same is clearly not working for the thousands unemployed, not to mention the financial and economic analysts who are looking at the numbers.
The fact that Anchor grades Bermuda, because of its debt, as next in line to ... Portugal, Ireland, Italy, Greece and Spain reflects the real world seriousness of our situation. The debt problems those countries are trying to deal with are horrific. The difference between them and us, though, is that they have a safety net. For them, there is the possibility of a European Central Bank bailout. We have nothing.
He added: The Government has not been telling Bermuda the truth of the situation. They talk of the debts they have run up as investments, and constantly characterise Bermudas debt level as modest, because our ratio of debt to GDP is lower than that of other countries. As Anchor says, that is far too simplistic a measure. By Anchors far more complex and nuanced measurement, we are fifth worst, behind Spain, Ireland, Portugal and Greece.
Mr Richards described the Anchor report as highly disturbing.
In a statement issued after Mr Richards a PLP spokesman said: Both the timing and methodology surrounding this report are highly suspicious. We are confident that the people of Bermuda will see this for what it is and send the OBA a message on election day. When you look at unbiased reports on the state of the economy, you can look to Moody's who called our outlook stable. Fitch, who also called our outlook stable. And, S&P, who also noted that our outlook is stable. We encourage Bermudians to trust unbiased, credible international analysts".