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Moody's: Greek Default 'Virtually Certain'

But EU effort means country will likely stabilize

By the Associated Press

Posted Jul 25, 2011 6:27 AM CDT

(AP) – Moody's downgraded Greece's bond ratings by a further three notches today and warned that it is almost inevitable the country will be considered to be in default following last week's new bailout package. The agency says the new EU package of measures implies "substantial" losses for private creditors. As a result, it cut its rating on Greece by three notches to Ca—one above what it considers a default rating.

Though Moody's said a Greek debt default is "virtually certain," it noted that the new measures will increase the likelihood that Greece will be able to stabilize and eventually reduce its overall debt burden. It also said the package also benefits other eurozone countries by "containing the near-term contagion risk that would likely have followed a disorderly payment default or large haircut on existing Greek debt."

Greek Prime Minister George Papandreou, left, talks with Greek President Karolos Papoulias during their meeting in Athens, on Friday, July 22, 2011.
Greek Prime Minister George Papandreou, left, talks with Greek President Karolos Papoulias during their meeting in Athens, on Friday, July 22, 2011.   (AP Photo/Petros Giannakouris)
Newspapers are displayed in Athens on July 22, 2011, hours after eurozone leaders and private creditors agreed to give Greece a new 159-billion-euro bailout.
Newspapers are displayed in Athens on July 22, 2011, hours after eurozone leaders and private creditors agreed to give Greece a new 159-billion-euro bailout.   (Getty Images)
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COMMENTS
Showing 3 of 8 comments
Spudsy
Jul 25, 2011 1:29 PM CDT
Someone please explain why we still listen to Moody's and also why the lying scumbags still have a company after the "expert" valuations they placed on bad debt in 2007? They should have been "Arthur Anderson-ed" out of business. 
n230099
Jul 25, 2011 7:06 AM CDT
So...if I've got this straight...if we raise our debt ceiling, promising to borrow more because we cannot produce the Capital in this economy, and promise to spend it on things that don't produce leading to the need to borrow more...we get to keep our "A" rating? Why wouldn't these so called "ratings" agencies be more concerned that we are heading the way of Greece? 
HMunster
Jul 25, 2011 6:53 AM CDT
Maybe Arianna Huffington can bail them out...

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debt • Greece • Moody's • bond ratings • Greek debt crisis • Greece bailout • Greek national debt

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