Open

Coming up

Don't miss

Replay


LATEST SHOWS

ENCORE!

Weekly Music Show: Tony Bennett and Lady Gaga's new album

Read more

AFRICA NEWS

Frenchman kidnapped in Algeria: 'IS'-linked jihadists claim abduction of 55 year-old tourist

Read more

DEBATE

What's the deal with Turkey? (part 2)

Read more

MEDIAWATCH

The Sarkozy soap opera

Read more

DEBATE

What's the deal with Turkey?

Read more

LIFESTYLES

New road trip

Read more

LIFESTYLES

High-tech in France

Read more

DOWN TO EARTH

Global warming: A drowning planet

Read more

THE BUSINESS INTERVIEW

Christian Kastrop, Director of Policy Studies, OECD

Read more

Europe

Greek financial woes deepen after S&P downgrade

Text by News Wires

Latest update : 2011-05-11

Greece's fiscal woes deepened on Monday after Standard & Poor's downgraded the country's credit rating to B from BB-, pushing the country further into ‘junk’ territory. The rating agency also warned that it may be necessary to restructure its debt.

REUTERS - Standard and Poor’s cut Greece’s rating to B from BB- on Monday, dragging it further into junk territory over concerns that a debt restructuring is increasingly likely.

One year into its EU/IMF bailout, Greece is struggling with weak revenues and a deep recession, fuelling speculation that it will have to restructure its debt to pull itself out of the fiscal mess that triggered the euro zone’s crisis.

 
“In our view, there is increased risk that Greece will take steps to restructure the terms of its commercial debt, including its previously-issued government bonds,” the agency said in a statement, warning that more downgrades could come.
 
S&P said euro zone countries would likely want private holders of Greek government debt to extend bond maturities as governments consider easing terms on the bailout that saved Greece from bankrupcty last year.
 
It said its projections suggest that principal reductions of 50 percent or more, known as a haircut, could be needed to restore Greece’s debt burden to a sustainable level.
 
European shares extended falls in afternoon trade on Monday after ratings agency S&P’s move, which downgraded Greece’s credit rating to lower than Belarus and Senegal.
 
By 1233 GMT, the FTSEurofirst 300 index of top European shares fell 0.8 percent to 1,135.28 points, with Greek benchmark down 2.3 percent, underperforming peers in the Thomson Reuters Peripheral Eurozone Index which shed 1.8 percent.
 
Greece, whose fiscal slippages triggered Europe’s debt crisis, is rated junk by all three major rating agencies. All other euro zone countries have investment grades only.
 
Monday’s rating puts S&P’s rating of Greece one notch below Moody’s B1 grade and four notches below Fitch’s BB+ rating.

 

Date created : 2011-05-09

  • GREECE

    Greek Central Bank rules out debt restructuring

    Read more

  • GREECE

    Greece reacts with fury as Moody’s slashes its credit rating again

    Read more

  • GREECE

    General strike, protests mark Athens austerity vote

    Read more

COMMENT(S)