Athens (Reuters) - cut Fitch rating credit of Greece by three notches Friday, pushing the country deeper into territory junk and warned that any sort of debt restructuring would be by default.
Fitch was the second rating agency to warn that it would consider any imposed loss to holders of bonds default ci after Standard and Poor said the same this month.
"An extension of the maturity of bonds existing would be regarded as an event of default by Fitch and the Greece and obligations would be assessed as a result, the rating agency has."
If private sector "burden sharing" is coercive, the credibility of commitments in principle EU/IMF not only for the Greece, but also the Ireland and the Portugal could be seriously diminished and influence on financial stability throughout the euro areaHe said.
A year after its bailout of the Monetary Fund International European Union, Greece is faced with low incomes and a deep recession, fuelling speculation that it will have to restructure its debt to withdraw himself from the budgetary problems that triggered a crisis in the euro area.
"The rating downgrade reflects the magnitude of the challenge to the Greece to implement a program of tax reforms and radical structural necessary to secure State solvency and the foundations for economic recovery sustained," Fitch said in a statement.
Three-notch cut to "B +" with a negative perspective takes Fitch rating "highly speculative" territory, largely in accordance with Standard & Poor "B" rating and the rank of "b1" from Moody. Both have also warned that they could drag it deeper in junk.
The Greece said that the decision was influenced by "intense rumours" in the press at a time where the Greece program was evaluated by the lenders and ignored the new commitments.
"He overlooks the additional commitments already undertaken by the Greek Government to achieve its fiscal 2011 and accelerate its privatization program", the Ministry of finance said in a statement.
But Fitch said implementation and political risk increased more austerity measures were necessary to achieve the objective of the 2011 of 7.5% of the GDP budget deficit and warned downgrades more if the European Union and the IMF do not produce a credible plan for the indebted countries.
"In the absence of a programme of EU and the IMF fully funded and credible, the rating probably fall into the category"CCC", indicating that a Greek sovereign debt default value was highly likely," Fitch said.
MISSING TARGETS
Analysts said that move was no surprise after disappointing figures for the budget State from January to April, which suggest that the efforts of the Government were not sufficient to meet the objectives of the rescue plan.
"Given the poor economic conditions, more austerity is not guaranteed is reflected in the improvement of the budgetary figures and, in our view, it will be difficult to find a lasting solution without having to resort to a restructuring of the debt of any kind"said Diego Iscaro of IHS Global Insight."
Paul Rawkins, Director Senior Fitch, said that he did not expect to be able to return to the market before may 2013, when its agreement help 110 billion euro EU/IMF expires, and a strong rescue plan had to be put in place beyond this datethe Greece.
"It should probably be long enough for the Greece obtain a recovery in place, the tax to be much better to research and the debt situation begin to go down," said Rawkins.
Fitch said that the more emphasis on privatization has also increased EU funding and the IMF can be delayed, risks as EUR 50 billion in sales of targeted assets will be difficult to meet.
Despite this, Fitch said he believes that the Government remains committed to its budget program and some assets would be sold at the end of the year.
Rating B + reflects the conviction of the EU and the IMF will find fresh funds for the Greece and that its obligations will not be subject to the "soft restructuring" or "re-profiling".
Standard and poor, downgraded credit Greece additional rating into junk territory b may 9, had also warned that any extension of debt maturities bond held by private investors would be considered a selective default.
"The sharing of the private sector constitute probably an Exchange in distress according to our criteria, to which assign us a rating of"SD"for selective default," the Agency said.
The President of the Eurogroup 17 countries Jean-Claude Juncker acknowledged Tuesday Greece may have towards a "soft restructuring" its debt, although that the European Central Bank remains firmly opposed to such a step.
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