Fitch pushed Greece's credit rating deeper into junk territory on Friday, warning of even further downgrades if the EU and the IMF do not come up with a credible plan to resolve the country's debt crisis.
One year into its EU/IMF bailout, Greece is struggling with weak revenues and a deep recession, fuelling speculation that it will have to restructure its debt to pull itself out of the fiscal mess that triggered a euro zone crisis.
"The rating downgrade reflects the scale of the challenge facing Greece in implementing a radical fiscal and structural reform program necessary to secure solvency of the state and the foundations for sustained economic recovery," Fitch said in a statement.
The three-notch cut to 'B+' with a negative outlook takes Fitch's rating into "highly speculative" territory, broadly in line with Standard & Poor's 'B' rating and Moody's 'B1' grade. Both have also warned they could drag it deeper into junk.
"In the absence of a fully funded and credible EU/IMF program, the rating would likely fall into the 'CCC' category indicating that a Greek sovereign debt default was highly likely," Fitch said in the statement.
The chairman of the 17-country Eurogroup Jean-Claude Juncker acknowledged for the first time on Tuesday Greece may have to move toward a "soft restructuring" of its debt.
Fitch warned that it would consider any extension of debt maturities -- "soft restructuring" or "re-profiling" -- to be a default event.