Moody's downgrades Greece again

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http://finance.fortune.cnn.com/2011/06/01/moodys-downgrades-greece-again/

By Colin Barr June 1, 2011: 3:41 PM ET

The Greek comedy took another twist Wednesday.

Moody's downgraded Greece again, putting 50-50 odds on a default thanks to the country's strapped finances and tortured European politics.

The rating agency cut Greece's rating to Caa1, its third-lowest rating, and kept its outlook negative, meaning another downgrade could come soon. Moody's cited rising chances that the country won't stabilize its debt burden, which has been getting heavier as borrowings rise and the economy shrinks. It also blamed Greece's "highly uncertain growth prospects."

The decision is the latest recognition of the fact that the Greek government won't be able to pay its bills unless it rips up some of the 300 billion-plus euros of IOUs it has issued. That would mean forcing investors to share some of the pain being borne by Greek taxpayers, on the occasions they can be located.