With Greece’s fiscal situation seemingly deteriorating every day, and little hope of any substantive deal on the horizon, Standard & Poor’s just slashed the country’s credit rating.
That S&P downgrade sends Athens even further into junk territory, down from B- to CCC+, according to the Financial Times.
Here’s how S&P judges whether a country is deserving of a CCC+ rating:
The issuer is currently vulnerable and is dependent upon favourable business, financial, and economic conditions to meet its financial commitments. The issuer’s financial commitments appear to be unsustainable in the long term, although the issuer may not face a near term (within 12 months) credit or payment crisis.
Which doesn’t sound particularly healthy.
The country is struggling to negotiate a bailout deal with its European creditors, and things are not looking good. But even if Greece does meet the conditions its lenders want and get enough to please the far-left government and its supporters, it will be back in this situation later in the summer — the bailout will only last for three or four months.