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Moody’s cuts Greece credit rating by three points
Business digest: Country faces crisis as its credit rating is labelled ‘highly speculative’
Credit ratings agency Moody's this morning downgraded Greece by three levels from Ba1 to B1 and assigned it a negative outlook. Greece's credit rating is now classed as "highly speculative", and is five places from the lowest possible rating.
The country has been receiving EU support in the form of a €45bn rescue package since May 2010. This is due to run out in 2013, and Moody's believes the country may default on its debt soon afterwards. B1 level countries have a 20 per cent rate of failing to repay debts.
The agency also cited concerns over a lack of action against income tax evaders and an inability to introduce sufficient budget cuts. Greece's credit rating has fallen nine points in the last 15 months.
The Greek finance minister, George Papaconstantinou, condemned Moody's for the downgrading as "unbalanced and unjustified", and warned that such decisions could "initiate damaging self-fulfilling prophecies".
Read a full report at the Guardian. ·
