ATHENS, Greece (AP) - Standard & Poor's has cut its credit rating on Greece further into junk status amid concerns over the country's cash position, as the country's new government signaled it would not give up on demands to overhaul bailout agreements.
ATHENS, Greece (AP) — Standard & Poor's has cut its credit rating on Greece further into junk status amid concerns over the country's cash position, as the country's new government signaled it would not give up on demands to overhaul bailout agreements.
The agency said Friday it has lowered Greece's long-term rating by one notch to B- and even warned over the country's future membership of the 19-country eurozone.
It said a further downgrade is possible by keeping the country on so-called "CreditWatch negative." S&P said it aims to "resolve" the CreditWatch status by March, 13.
The action "reflects our view that the liquidity constraints weighing on Greece's banks and its economy have narrowed the timeframe during which the new government can reach an agreement on a financing program with its official creditors," S&P said.
Though the Greek economy has emerged from a brutal six-recession, the country remains burdened by its debts, which stand at over 170 percent of Greece's annual GDP. Left-wing Syriza swept to power less than two weeks ago in a general election on a promise to bring an end to Greece's years-long austerity.
"Although the newly elected Greek government has been in power for less than two weeks, we believe its limited cash buffers and approaching debt redemptions to official preferred creditors constrain its negotiating flexibility," S&P said.
The agency also warned that "a prolongation of talks with official creditors could also lead to further pressure on financial stability in the form of deposit withdrawals and, in a worst-case scenario, the imposition of capital controls and a loss of access to lender-of-last-resort financing, potentially resulting in Greece's exclusion from the Economic and Monetary Union."
Eurozone officials have so far rejected demands by Greece to cut short its bailout program and start talks to restructure is rescue debt.
Athens is seeking permission from the European Central Bank to sell more treasury bills instead of receiving final loan installments.
Late Friday, Prime Minister Alexis Tsipras held an unscheduled meeting with the government's top finance officials — who said the new Greek administration would not renege on its election pledge to seek a renegotiation of the bailout deal.
"It is clear that the government will remain committed to the clear mandate it has received from voters and will not accept an extension of the dead-end and catastrophic bailout," a senior official said.
The official asked not to be named as talks with European officials are ongoing.