Moody’s rating agency downgraded Greece’s rating from B1 to Caa1, meaning that it places it closer to the probability of default, according to bbc.co.uk.
The new country rating means a probability of 50% for Greece to enter into default or restructure its debt in the next five years, according to Moody’s methodology.
Meanwhile, the Government in Athens is completing negotiations to get the fifth portion of the 110 billion euro loan from the IMF and the European Union.
Last week, Chairman of the euro group of finance ministers, Jean-Claude Junker, said that IMF will not approve the release of the next share of money if Greece will not be able to convince the representatives of international financial institutions that the country will remain solvent over the next 12 months.
The rating agency Moody’s maintained its negative outlook, meaning that there could be further fall of Greece’s rating.
The Rescue Plan of Greece
Greece’s external debt burden has grown to exceed 160% of its GDP. Having no exchange rate leverage, and because Greece is in the euro zone, the economy is more difficult to mend. However, Greek authorities deny rumors that the country could leave the euro zone.
The government in Athens has developed an ambitious plan to remove the country from crisis. Among the most important measures are the privatization of state owned companies and concessions.