Greece’s “unsustainable” debt commitments prompt downgrade

Greece’s “unsustainable” debt commitments prompt downgrade

Ratings agency S&P has lowered its long and short-term sovereign credit ratings on Greece to CCC+/C from B-/B as it warned that the country’s debt and financial commitments are “unsustainable”.

It said the outlook for the country is negative, “given the risk of further worsening in liquidity for the sovereign, the banks, and the economy”.

According to S&P, the Greek economy has contracted by nearly 1 per cent over the past six months, in spite of a weaker euro and lower oil prices.

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It believes the economic prospects for the country could “deteriorate” further, unless talks between Greece and its creditors conclude soon.

The Syriza government is still negotiating the terms of its debt repayments with its creditors and has been in talks with Germany’s finance minister Wolfgang Schaeuble since it was elected nearly three months ago.