Moody's downgrades Greece

Greece's credit rating has crashed once again and now stands on a par with Fiji and Vietnam.

Moody's downgraded the eurozone nation's sovereign debt yesterday by three notches to B1 from Ba1, way below even troubled Ireland, Portugal or Spain.

Not much more than a year ago Greece was an A1 risk, and is now firmly into "junk" territory. It suggests, once again, that international investors have little confidence in the country's ability to repay its debts.

Markets may also have been unnerved by suggestions from the freshly elected Irish government that it wishes to "renegotiate" the terms of its EU/IMF bailout.

Greece received €110 billion ($208 million) in assistance last spring. Moody's justified its move because of the "risk of a post-2013 restructuring might lead the Greek authorities and investors to participate in a voluntary distressed exchange before that time".

The credit agency also cast doubt on the ability of the government to deliver its austerity programme and on the authorities' ability to gather taxes.

Greece said Moody's move was "incomprehensible" and did not properly take into account the "upside impact" on the economy from a structural reforms programme.

- Independent