Fitch downgrades five Greek banks to CCC

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Fitch downgrades five Greek banks to CCC

Fitch downgrades five Greek banks to CCC
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The debt the crisis rattling the eurozone has deepened, after ratings agency Fitch downgraded Greece further into junk territory and the brink of default.

Fitch says the slow pace of agreeing on more official aid is behind it’s decision

It’s a move that has angered the European Commission.

“We do regret and hardly understand this decision by Fitcht. The EU and IMF have just agreed to release another tranche of the financial support to Greece, which is a clear evidence that the conditions for the disbursement have been met,” Commission spokesperson Pia Ahrenkilde-Hansen told reporters.

It’s not the first time the rating agencies have annoyed the Commission.

Moodys has also downgraded Ireland to junk status.

But Fitch is optimistic about Italy’s chances of eliminating its deficit by 2014.

Some think it’s best to look for a European solution, rather than national ones.

European lawmaker Pervenche Beres says debt should be mutualised among eurozone members. It’s an element that she believes could help strengthen the very important political link between the members of the eurozone.

The markets have been rattled by the failure of European finance ministers to reach an agreement on relieving Greece’s debt burden.

That’s been accentuated by indecisiveness among Eurozone leaders who were to meet this week to address the problem. Their summit might now take place next week.

College of Europe Economist Pierre Defraigne, says there is concern that the whole thing might get out of control, that speculation might hit other countries, with rates spiralling, and shaking the very foundations of the eurozone.

Further uncertainty was expected following the release of results of stress tests on the capacity of European banks to absorb market shocks.