Tags: Fitch | Downgrade | Greece | Euro

Fitch Downgrades Greece, Cites Euro Exit Risk

Thursday, 17 May 2012 02:14 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Fitch ratings agency downgraded debt-crippled Greece deeper into junk territory on Thursday, warning of a "probable" Greek exit from the euro currency union if new national elections next month produce an anti-bailout government.

Fitch said it had cut Greece's rating by one notch, from B- to CCC, the lowest possible grade for a country that is not in default.

"The downgrade of Greece's sovereign ratings reflects the heightened risk that Greece may not be able to sustain its membership of Economic and Monetary Union," the agency said in a statement.

In addition to its acute financial woes, Greece has entered a protracted political crisis after elections on May 6 left no party with enough seats in Parliament to govern alone, and nine days of hectic talks failed to reach a coalition deal.

The country is now headed for a new vote next month, most likely on June 17, and anti-austerity parties which clocked strong gains on May 6 are again expected to do well. That has raised deep concerns that, if the new government reneges on Greece's austerity pledges, the European Union and the International Monetary Fund could cut off the flow of bailout loans. Those rescue funds have shielded the country from bankruptcy for two years but had been agreed in exchange for deeply unpopular cutbacks.

"In the event that the new general elections scheduled for 17 June fail to produce a government with a mandate to continue with the EU-IMF program of fiscal austerity and structural reform, an exit of Greece from (the euro) would be probable," Fitch said.

"In the event of a Greek exit from EMU, Fitch would treat the forcible re-denomination of sovereign and private sector debt into a new Greek currency as a default event," it added.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved