Fitch cut Greece’s rate into Junk – Greek FinMin reaction

Posted by in Economy

Ratings agency Fitch cut Greece’s credit rating to junk on Friday, highlighting persisting doubts over the country’s ability to pull itself out of a severe debt crisis that has shaken the euro zone, Reuters reported.

The rating agency cut Greece’s rating to BB+ from BBB- and kept it under negative outlook. Meaning the rating could be cut further in the future. 

Greek debt is now rated junk by all three major rating agencies.

“The downgrade acknowledges that while Greece’s economic and fiscal performance under the EU-IMF programme has in many respects exceeded expectations, its heavy public debt burden renders fiscal solvency highly vulnerable to adverse shocks,” Fitch said in a statement.

The agency said a “high degree of uncertainty” surrounds Greece’s goal of returning to international credit markets in 2012, as stipulated under the International Monetary Fund-European Union bailout.

Greece’s Finance Ministry Reaction

Greek Finance Ministry lets know that the downgrade by only one notch came after  Greek FinMin George Papaconstantinou, contacted and informed  Fitch and Moody’s  during the last 48 hours.

In a written statement the Greek Finance Ministry responded to the Fitch downgrade saying that the fiscal policy of Greece has been recently evaluated as positive by Athens’ lenders EU and IMF  during the release of the December  EUR 110 billion tranche.

“On the base of such evaluation, the Fitch downgrade makes necessary the establishment of a new framework for the rating agencies operating in Europe” the statement said.