S&P mentioned late yesterday that it lowered the debt rating for Greece by on point to BBB+ from A- as the country is suffering from swelling budget deficit and is unable to repay debts unless the government intervenes. Greece, which has the largest budget deficit in the EU, was also lowered in December by Fitch ratings to BBB+ which is raising concerns, despite the ECB approval for bonds rated as BBB- as collateral for loans to cope with the financial crisis.

However, Papandreous, the Greek finance minister, announced that the government is ready to do radical changes to lower the deficit. He is planning to slash the deficit from 12.7% of GDP to 8.7% in 2010 and to reach less than 3%, which is the level set by the EU, by 2013; where the reduction will be financed through cutting expenditures by 9 billion euros and gaining near 4.5 billion euros from tax overhauls.