Moody's downgrades Greece's debt rating to 'junk'

International credit rating agency Moody's on April 29 downgraded Greece's debt rating by one notch to "junk" - Caa2, saying that Athens' ability to reach a new bailout agreement with creditors is uncertain while many debts are about to mature.

Greek people wait to receive their salaries at the Central Bank in Athens on April 29. Source: AFP/TTXVN

Moody's downgraded the eurozone member's debt rating to Caa2, just two notches above "default," with a negative outlook, suggesting that a further downgrade cannot be ruled out.

Moody's said that the ongoing negotiations between Greece and the "troika" of creditors (including the European Union-EU, the European Central Bank-ECB and the International Monetary Fund - IMF) show a not-so-bright outlook.

Even Moody's asserts that if a short-term financial agreement is reached, negotiations between Greece and its creditors on a new bailout package in the coming months will be very difficult.

The question is whether Athens can meet the demands and targets of its creditors to receive a third bailout program.

Moody's believes that in addition to resolving political disagreements, to reduce the public debt burden, Greece needs to achieve a higher growth rate in the medium term.

Recent decisions by the Greek government have not only raised doubts, but also increased concerns about Athens' ability to receive support from creditors in the coming years.

So far, Prime Minister Alexis Tsipras' government has firmly opposed austerity policies and refused to carry out spending-cutting reforms as requested by creditors, causing negotiations to fall into a deadlock.

According to Vietnam+