Fitch cut its rating Friday for the National Bank of Greece and four other institutions to the “speculative” range, so-called junk status. The ratings change came a day after Fitch said the Greek government is “vulnerable to default.”
The downgrade also came as German Chancellor Angela Merkel suggested to Greece's caretaker government that as it holds new parliamentary elections June 17, it also stage a referendum on whether Greeks want to stay in the 17-nation eurozone. But the office of Prime Minister Panagiotis Pikrammenos said calling for such a vote on eurozone membership was beyond the caretaker government's authority.
With Greek political leaders unable to form a new coalition government after a splintered vote earlier this month, numerous European leaders have voiced concern that Greece could default on its debts and become the first country to leave the eurozone. But they also have called on the Athens government adhere to its commitment to impose unpopular austerity measures in exchange for billions of dollars in new international bailout funds.
The European Union's trade commissioner, Karel De Gucht, told a Flemish newspaper that the European Commission and the European Central Bank are working on “emergency scenarios” if Greece abandons the euro and readopts its old currency, the drachma.
In Washington, new French President Francois Hollande said both he and U.S. President Barack Obama support Greece's continued membership in the eurozone.