Greece downgraded deeper into junk
NEW YORK (CNNMoney) -- The credit rating on Greece's government debt was downgraded deeper into junk bond territory on Thursday.
Fitch Ratings cited the increased risk that Greece, operating now with a caretaker government, could be forced to leave the eurozone following more elections next month.
An exit from the eurozone would be "probable" if the elections fail to produce a government willing to stand by earlier austerity agreements reached with eurozone leaders, Fitch said.
In turn, the country's departure from the eurozone would "result in widespread default on private sector as well as sovereign euro-denominated obligations," the ratings agency said. (Moody's downgrades Spanish regions)
And all 16 other countries in the eurozone could be dinged.
"Fitch would place all eurozone sovereign ratings on Rating Watch Negative following the Greek elections if Fitch assesses that the risk of a Greek exit from [the eurozone] is probable in the near term," the agency said.
Fitch said the other nations' economies would be hurt if Greece dropped the common currency, and that a continuation of the euro is a basic tenet of its debt ratings on of all the countries using the euro.
The bailout and debt restructuring for Greece approved by the so-called troika -- the European Union, European Central Bank and International Monetary Fund -- required the Greek parliament to approve an austerity program of cuts in government spending and benefits.
http://money.cnn.com/2012/05/17/news/economy/greece-downgrade/
= new reply since forum marked as read
