A pedestrian passes Greece’s central bank in Athens on Thursday. (Bloomberg)
ATHENS (AP) ― Fitch ratings agency downgraded debt-crippled Greece deeper into junk territory on Thursday, warning of a “probable” Greek exit from the euro currency union if new national elections next month produce an anti-bailout government.
Fitch said it had cut Greece’s rating by one notch, from “B-” to “CCC,” the lowest possible grade for a country that is not in default.
“The downgrade of Greece’s sovereign ratings reflects the heightened risk that Greece may not be able to sustain its membership of Economic and Monetary Union,” the agency said in a statement.
In addition to its acute financial woes, Greece has entered a protracted political crisis after national elections on May 6 left no party with enough seats in parliament to govern alone, and nine days of hectic talks failed to produce a coalition deal.
The country is headed for a new vote next month, most likely on June 17, and anti-austerity parties which clocked strong gains on May 6 are again expected to do well.
That has raised deep concerns that, if the new government reneges on Greece’s austerity pledges, the European Union and the International Monetary Fund could cut off the flow of bailout loans.