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May 18, 2012, 02.14 PM IST | Source: Reuters

Fitch cuts Greece's rating on euro zone exit risk

Fitch Ratings Agency on Thursday downgraded Greece's credit rating to CCC from B-minus, citing the heightened risk that the country might have to leave the euro zone.

Fitch Ratings Agency on Thursday downgraded Greece's credit rating to CCC from B-minus, citing the heightened risk that the country might have to leave the euro zone.

The failure by Greek politicians to form a government underscores a lack of public and political support for an austerity program, Fitch said in a statement explaining the cut to Greece's long-term foreign and local currency issuer default ratings.

Should new elections fail to result in a mandate for a new government to continue austerity measures, a Greek exit from the monetary union would be "probable," Fitch said.

"A Greek exit would likely result in widespread default on private sector as well as sovereign euro-denominated obligations, despite a moderate sovereign debt service burden following the restructuring of Greek government bonds in March," the statement said.

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