17-Jan-2011 1:46 PM

Greece's debt ratings downgraded to junk; outlook negative

Greece's long-term debt rating was downgraded by Fitch Ratings by one level to 'BB+', meaning Greece has lost its last investment grade rating (Bloomberg/Wall Street Journal, 14-Jan-2011). Fitch had warned of the downgrade, which puts the rating at the same level as at Moody’s Investors Service and Standard & Poor’s. The Fitch grade has a negative outlook. Fitch stated the country’s “heavy public debt burden renders fiscal solvency highly vulnerable to adverse shocks” was the reason behind the downgrade. Greek Finance Minister George Papaconstantinou stated Fitch Ratingsand other credit- rating services are ignoring Greece’s achievements in reining in its fiscal deficit (Kathimerini, 16-Jan-2011).