Ratings agency Moodys Investors Service has slashed its credit rating for Greece by three notches and warned that even further downgrades could be in the works, according to The Wall Street Journal. On Monday, Moodys announced that it would lower Greeces rating from B1 to Ba1, and did not lift the negative outlook for the rating. Rival agencies Standard & Poors and Fitch Ratings currently hold the country at slightly higher double-B-plus, but share the negative outlook with Moodys. Moodys cited the countrys very large debt and significant implementation risks of what it acknowledged is a very ambitious austerity plan.
Meanwhile, the European Unions Commissioner for Economic and Monetary Affairs, Olli Rehn, urged leaders to offer flexible support to Ireland and Greece during negotiations this week. Rehn said, I see a danger that we might overburden both countries with overly strict credit conditions, and urged for the timeline of Greeces repayment plan to be doubled. The commissioner also pushed for easing the terms of loans on offer to the struggling nations.