Fitch downgrades Greece, says default ‘highly likely’

PanARMENIAN.Net - Fitch ratings agency says it has downgraded Greece further into junk status, from 'CCC' to 'C' following the announcement of the details of the country's debt swap deal with private creditors.

According to AP, the agency said Wednesday, Feb 22, the downgrade indicated "that default is highly likely in the near term." In June, the agency had said it would consider Greece to be in restricted default if the bond swap deal went ahead.

The bond swap deal with private creditors will see euro107 billion ($141 billion) of Greece's debt held by banks and other private holders of government bonds written off.

Earlier in the day, Greece scrambled to adopt a batch of emergency laws that will further cut incomes and government spending, while revising deficit estimates higher, a day after securing a new bailout and debt relief deal designed to stave off bankruptcy.

The new austerity measures demanded by creditors in return for the rescue loans follow two years of deepening misery, with the Greek economy in freefall and unemployment at a record high. Angry unions have called two separate protest rallies outside Parliament in the afternoon.

On Tuesday, the 17-country eurozone approved Greece's second financial lifeline in less than two years, worth euro130 billion ($172 billion), and agreed to impose a euro107 billion ($141 billion) debt writedown on banks and other private holders of Greek bonds.