Greece debt downgraded by Fitch by two notches

As if not facing enough trouble Fitch rating agency has downgraded Greek sovereign debt from CCC to C just one notch above default. At the same time unions are mounting new protests against austerity measures.

Greek unions have staged fresh protests as the country's parliament debates emergency legislation to carry out a euro zone bailout deal and Fitch ratings says the country is close to default. The new bailout deal is worth 310 billion.

The rating agency claimed that a Greek default was highly likely and in the near term in spite of the bailout package. Greece has already been in recession for five years and unemployment is running at 20 per cent. The cuts to the public sector will drive unemployment even higher.

Along with more austerity measures a draft law forecasts the 2012 deficit to be 6.7 per cent of GDP up from an earlier forecast of 6.4 per cent. Nearly 5,700 demonstrators marched in new protests in Athens. Another 2,000 demonstrated in Thessaloniki.

Elections are scheduled for April. Parties both on the left, right and in the middle who support the austerity measures will probably suffer at the polls. The present governmet is a coalition of right, center, and left (socialist) parties. So-callled reforms being debated include cuts to the health care system of 1.3 billion further reducing services as the need for them is increasing.

By the end of February Greece must approve more than 3.9 billion in added cuts to those already agreed to..Even the constitution is to be amended so that debt repayments take precedence over any other government commitments. Health, education, security, pensions, all are subservient to finance capital. Democracy is dead in Greece and the markets cheer. Although the cheering is dying down as many realize default is on the horizon in spite of all this drastic action. For more see this article.