Greece, Portugal Credit Ratings Cut Further at S&P
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Standard & Poor's Corp. ratings agency downgraded two of the most troubled euro zone member states Tuesday, as fears grow that the nations will need to refinance debt after 2013.
S&P cut Greece's long-term sovereign rating by two notches from double-B-minus from double-B-plus, while also lowering Portugal one notch from to triple-B-minus from triple-B.
The move comes shortly after the S&P cut Portugal by two notches, as the country is close to losing its investment-grade status for the first time.
"The negative outlook reflects our view of the risks to Portugal's fiscal performance from a sustained weakening in domestic demand, as government austerity measures and weak credit stimulus weigh on incomes," S&P said in a statement. "Portugal still faces sizable twin deficits and their reduction will stress policymakers' resolve in the face of what we believe will become an increasingly hostile public opinion."
The ratings agency said Greece will likely have to access additional assistance by 2013, following the replacement of the current European Financial Stabilization Facility by the "European Stabilization Mechanism".
S&P cut Greece's long-term sovereign rating by two notches from double-B-minus from double-B-plus, while also lowering Portugal one notch from to triple-B-minus from triple-B.
The move comes shortly after the S&P cut Portugal by two notches, as the country is close to losing its investment-grade status for the first time.
"The negative outlook reflects our view of the risks to Portugal's fiscal performance from a sustained weakening in domestic demand, as government austerity measures and weak credit stimulus weigh on incomes," S&P said in a statement. "Portugal still faces sizable twin deficits and their reduction will stress policymakers' resolve in the face of what we believe will become an increasingly hostile public opinion."
The ratings agency said Greece will likely have to access additional assistance by 2013, following the replacement of the current European Financial Stabilization Facility by the "European Stabilization Mechanism".
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