ATHENS, Greece (AP) – Standard & Poor’s has cut its credit rating on Greece further into junk status amid concerns over the country’s cash position, and even warned over the country’s future membership of the 19-country eurozone.
As the new Greek government tries to reach a new deal with bailout creditors, the agency said Friday it has lowered Greece’s long-term rating by one notch to B- and warned that a further downgrade is possible by keeping the country on so-called “CreditWatch negative.” S&P said it aims to “resolve” the CreditWatch status by March, 13.
S&P said the downgrade “reflects our view that the liquidity constraints weighing on Greece’s banks and its economy have narrowed the timeframe during which the new government can reach an agreement on a financing program with its official creditors.”
Though the Greek economy has emerged from a brutal six-recession, the country remains burdened by its debts, which stand at over 170 percent of Greece’s annual GDP. Left-wing Syriza swept to power less than two weeks ago in a general election on a promise to bring an end to Greece’s years-long austerity.
“Although the newly elected Greek government has been in power for less than two weeks, we believe its limited cash buffers and approaching debt redemptions to official preferred creditors constrain its negotiating flexibility,” S&P said.