Brussels, 17/01/2011 (Agence Europe) - The lowering of Greece's credit rating (for its sovereign debt) by Fitch Ratings “underlines the need for a new framework for rating agencies at a European level and underscores the need to swiftly arrive at the necessary decisions at European level in order to complete the coordinated response to the current crisis”, stated the Greek finance ministry in a press release published at the end of last week, adding: “The determination by which the fiscal consolidation in the Economic Policy Programme is pursued, the reforms already implemented, those underway and the forthcoming extension of the repayment of the Euro 110 billion loan, all suggest that the rating decision cannot be justified on the basis of objective data for Greece”. On Friday 14 January 2011, Fitch lowered Greece's credit rating by one point from BBB- to BB+ because the Greek public debt is soon expected to reach more than 150% of GDP, the highest debt level in the eurozone. Fitch bases its rating on the fragility of Greek public finances in the medium-term and the lack-lustre economic growth in the country expected in 2011.
Before the summer, the European Commission will be unveiling new legislation on sovereign debt ratings. The big three credit rating agencies (Fitch Ratings, Moody's and Standard & Poor) challenge the idea that the rating of a country-at-risk is different from other credit ratings and oppose the idea of having to give three days' warning to a country if they are planning to downgrade them in order to give the country time to react. This is an idea the Commission is currently consulting on (see EUROPE 10251). The big three say that such a rule would undermine the credibility of their work and increase the risk of abuse of the market. (M.B./trans fl)