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Greek economy plain junk for S&P

Standard and Poor's (S&P) slashed its credit rating on Greece by three notches to CCC

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Greek economy plain junk for S&P

Citizens in front of the Greek parliament protest against the new wave of austerity measures.

21 Jun 2011

Standard and Poor's (S&P) slashed its credit rating on Greece by three notches to CCC, the lowest in the world, saying there is a significantly higher probability of a default in the struggling eurozone member.

"The downgrade reflects our view that there is a significantly higher likelihood of one or more defaults, as defined by our criteria relating to full and timely payment, linked to efforts by official creditors to close an emerging financing gap in Greece," said the rating agency last Monday. The downgrade comes as the European Central Bank (ECB) and Germany battle over how to bail out Greece and whether officials should push creditors to share some of the costs.

ECB President Jean-Claude Trichet said that his advice to European governments is to "avoid what would be a compulsory concept" and "avoid whatever would trigger" a default. The outlook on the rating is negative, S&P said. The rating company held its recovery rating at 'four,' indicating it estimates bond holders would recover 30 per cent to 50 per cent of their investment.

Source: Kathimerini

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