Fitch downgrades Greece

Fitch Ratings said it downgraded Greece's long-term foreign- and local-currency issuer default ratings to CCC from B-, along with its short-term foreign-currency issuer default rating to C from B.

The agency also revised its country ceiling to B-.

The downgrade of Greece's sovereign ratings reflects the heightened risk that Greece may not be able to sustain its membership of economic and monetary union (EMU), Fitch said.

In the event that the new general elections scheduled in June fail to produce a government with a mandate to continue with the EU-IMF program of fiscal austerity and structural reform, an exit of Greece from the EMU would be probable, the agency said.

A Greek exit would likely result in widespread default on private sector, Fitch said, as well as sovereign euro-denominated obligations, despite a moderate sovereign debt-service burden following the restructuring of Greek government bonds in March.

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