BUSINESS

Moody's: Impasse on bailout raises risks for Greece

TAGS: Finance, Economy

An impasse between the International Monetary Fund and eurozone member states on Greek bailout talks is "credit negative" for Greece, ratings agency Moody's said.

Greek Finance Minister Euclid Tsakalotos was scheduled to meet European officials in Brussels on Friday in an attempt to break a logjam in the bailout talks, state television reported.

"The impasse between the IMF and the euro area member states that are Greece's main creditors is credit negative for the sovereign because it raises the likelihood of one or more unfavorable outcomes," said Kathrin Muehlbronner, Senior Vice President at Moody's Investors Service.

In a note, dated February 9, the ratings agency said the impasse had a number of risks for Greece such as putting pressure on the government to deliver more measures than originally envisaged.

It added that the risks of early elections was rising given the political cost to the government and its slim majority in parliament.

Moody's added that there was also an increased risk that Greece's debt program will have to be renegotiated after German elections in September.

The agency rates Greece Caa3 with a stable outlook.

It said its note on Greece was an update to the markets and did not constitute a rating action. [Reuters]

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