News / Europe

Greek Credit Downgraded Even With Bailout

Pensioners march during an anti-austerity rally in front of the parliament in Athens, Greece, February 22, 2012.
Pensioners march during an anti-austerity rally in front of the parliament in Athens, Greece, February 22, 2012.

The Fitch financial services company is again downgrading the credit rating of Greece, saying that the debt-ridden country is "highly likely" to default on its financial obligations even after securing a new bailout from its European neighbors.

Fitch said Wednesday it has cut Greece two notches (from CCC to C), pushing the credit standing for the Athens government deeper into junk status. The ratings company took the action after Greece earlier this week secured a new $172 billion international bailout and negotiated a $142 billion writeoff of the debt it owes large financial institutions.

While Greece has reached a general agreement on elimination of more than half the debt its owes private creditors, it must now negotiate the specific terms of the writedown with individual banks and other investors. Greek officials say that when about two-thirds of its lenders agree to cut the amount the are owed, they will impose the same debt reduction involuntarily on its remaining lenders.

Fitch said such involuntary debt cuts for the private creditors will amount to a Greek default, and called the arrangement "distressed and de facto coercive."

Greek Prime Minister Lucas Papademos says the country has a lot of work to do before it starts to collect the new bailout money, its second rescue package in two years.

The Greek parliament has agreed in principle to the package of spending and job cuts demanded by the European Union and the International Monetary Fund. The lawmakers must now pass all 79 specific measures included in the package before getting the bailout funds.

The bailout will likely avoid the bankruptcy Greece faces if it cannot pay investors $19 billion when government bonds come due, March 20th.

The rescue package requires Greece to make deep and unpopular spending cuts. They include a 22 percent cut in the country's minimum wage and the elimination of 15,000 government jobs.

Thousands of Greeks have held sometimes violent street protests against the cuts, saying they have already sacrificed enough. More protests were planned for later Wednesday.

The head of the EU delegation to the United States, Ambassador Joao Vale de Almeida, told VOA in an exclusive interview that the bloc has learned a lot from the crisis, namely the need for a mechanism to deal with emergency situations, an improved level of economic governance and solidarity among all members of the 17-nation bloc that uses the euro.

"I think we learned a lot. We learned a lot about the means that we need to have to deal with emergency situations," said the ambassador.  "We didn't have them before. We created, we developed them to deal with the cases like Greece and a few other countries."

"Secondly, we learned that our governance system was not yet at the right level of sophistication, and we are in fact changing a lot; if not, there is a small revolution going on inside the euro area in the way we deal with what we call the economic governance. There is a lot being changed. And thirdly, I think we learned a very simple lesson. When you are part of a system, there has to be solidarity," he added.

Greece got a $145 billion bailout last year and is, by far, the biggest recipient of international aid in eurozone history. Yet Greece accounts for just two percent of the eurozone economy.

Some information for this report was provided by AP, AFP and Reuters.

You May Like

Hezbollah Chief Says Does Not Want War But Ready for One

VOA's Jerusalem correspondent reports that with an Israeli election looming and Hezbollah's involvement in Syria, neither side appears interested in a wider conflict More

Multimedia VOA SPECIAL REPORT: Despite Danger, Best US Minds Battle Deadly Virus

Scientists at America's premier biological research center race in military confinement to find effective drugs, speedier tests and a safe vaccine amid the deadliest outbreak of Ebola in history More

Kurdish Poet Battles to Defend Language, Culture

Kawa Nemir's work is an example of what he sees as an irreversible cultural and political assertiveness among Kurds in Turkey More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Egypt's Suez Canal Dreams Tempered by Continued Unresti
X
Heather Murdock
January 30, 2015 8:00 PM
Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Mobile Infrared Scanners May Help Homeowners Save Energy

Mobile photo scanners have been successfully employed for navigational purposes, such as Google Maps. Now, a group of scientists from the Massachusetts Institute of Technology says the same technology could help homeowners better insulate their houses and save some money. VOA’s George Putic has more.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid