A second EU rescue plan was meant to give Greece some breathing space but Moody’s credit agency has further downgraded the country’s debt rating, taking it even closer to default.
Last week, euro zone leaders agreed on a new big money bailout, with easier loan terms and private creditors shouldering part of the burden. While Moody’s admits the package has benefits for Greece, it says it sets a negative precedent for creditors of other debt-burdened countries.
The downgrade means Greece now has the lowest rating of any country in the world covered by Moody’s.
The Greeks face a huge challenge to improve the competitiveness of an economy, weighed down by 350 billion euros or so in government debt.