The Fitch rating agency on Tuesday downgraded Greece’s long-term debt ratings as well as those on four of the country’s largest banks, describing prospects for Greek public finances as negative.
Tuesday’s action was a fresh blow to Greece, saddled with high public deficits and debt, as it came a day after another agency, Standard and Poor’s, placed Greek debt under “negative” watch and warned of a downgrading if the government did not rein in its overspending.
In Brussels the EU’s executive commission urged the Greek government to take “more measures” to reduce its crippling deficit.
“A difficult situation in one euro-area member state is a matter of common concern for the euro area as a whole,” outgoing EU economic and monetary affairs commissioner Joaquin Almunia said in a statement.
“It is clear that Greece faces very substantial economic and fiscal challenges ... but more measures are required,” he said.
Fitch downgraded Greek long-term debt ratings to BBB+ from A- notation, warning that the outlook was negative “given the weak credibility of fiscal institutions and the policy framework.”
The agency later said it had downgraded its ratings on five Greek banks in light of its action on Greece’s sovereign debt.
Fitch lowered long-term debt ratings on four of Greece’s largest commercial banks, National Bank of Greece, Alpha Bank, Efg Eurobank Ergasias and Piraeus Bank, to BBB-plus from A-minus.
The Agricultural Bank of Greece saw its rating lowered to BBB-minus from BBB.
Analysts at Goldman Sachs described the sovereign downgrading as “important,” marking the first time the credit rating of bonds issued by a government in the eurozone had dropped to a point at which they would not be eligible for use as collateral at the ECB except for a “temporary change of rules in response to the [global] crisis.”
The Fitch agency, implying that it expected special budget action by the Greek government, said it “understands that further measures will be announced in January 2010 to support the reduction in the fiscal deficit to 3.0 percent of GDP by 2013.”
It said that “increased peer pressure” from within the EU and eurozone was likely “to strongly influence policy choices.”
But it also remarked that Greece’s sovereign ratings remained supported by the country’s high-income economy “relative to rating peers and membership of the EU and EMU [economic and monetary union].”
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
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