Jean-Claude Juncker, the head of the Eurogroup of finance ministers, criticised rating agency Moody's today for its 'irrational' downgrade of Greece's debt to 'junk' status.
'I don't understand why this further downgrading did intervene,' Juncker told reporters following a seminar on the European Union in Oslo.
The US-based rating agency slashed its debt rating for Greece by four notches from A3 to Ba1 yesterday evening, saying that even with the help of an EU-IMF bailout package there was considerable uncertainty about Greece would reduce its huge debt and balance its finances. The downgrade means some investors will no longer be allowed to buy Greek debt under the terms of their investment mandate and could lead to still higher borrowing costs for Athens if it goes to the markets for cash.
'These downgradings of rating are not in each and every case understandable and rational,' he said. 'Personally, I think that financial markets are behaving sometimes in a very irrational way,' he added.