Fresh downgrade by Moody’s

The government’s efforts to streamline the country?s finances took another blow on Wednesday evening as Moody’s rating agency downgraded Greece’s local and foreign currency bond ratings deeper into junk status.

The agency cited an increased risk that the country will not be able to handle its debt problems without an eventual restructuring, downgrading its rating by three notches, to Caa1 from B1 and maintaining its outlook as «negative.”

It also suggested that there is a 50 percent chance of a Greek default in the next five years.

Apart from the increased risk of restructuring, the agency also cited «highly uncertain» growth prospects and missed targets in budget reforms.

Moody’s argued that the government failed to meet some of its targets for 2010 and is likely to also miss some of those for this year.

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