Moody's: Impact Of Grexit On Euro Area Shouldn't Be Underestimated

The impact on the euro area if Greece were to leave the eurozone "should not be underestimated," Moody's said Thursday, a day after the ratings agency cut Greece's credit rating deeper into junk territory. Greece and its creditors are likely to reach an agreement on the country's debt, but the lack of progress "means the probability of a default, and of exit, is rising," said Moody's. While the direct economic and financial impact of a Greek departure from the euro area would be small, an "exit could nevertheless cause a confidence shock and disrupt government debt markets," said Alastair Wilson, managing director of global sovereign risk at Moody's, in a report. Moody's late Wednesday cut its rating on Greece's debt to 'Caa2'.