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

Conflicts Engulf Christians in the Middle East

Research finds an increase in faith-based hostilities, and Christians are facing persecution in a growing number of countries in the region More

Chinese Americans: Don’t Call Us 'Model Minority'

Label points to collective achievement, but some say it triggers resentment, unrealistic expectations More

Iran Bolsters Surveillance of Phones, Internet

Does increased monitoring suggest the government is nervous? 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.
Ukraine Battles Pro-Russia Rebel Assaulti
X
Daniel Schearf
August 29, 2014 9:30 PM
After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.

AppleAndroid