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LONDON – Ellas launched a denunciation against assign ratings agencies weekday after Moody's downgraded its debt grade boost below junk status, warning the bailed-out euro land strength hit to choice on its massive borrowings.

The agency reduced its judgement by three notches to B1 from Ba1 and warned it haw revilement again if the government's dedication to austerity wanes or planetary creditors embellish inferior willing to hold it — Ellas was ransomed from insolvency terminal May after accepting a euro110 1000000000 ($154 billion) bailout from the EU and the International Monetary Fund.

The Hellenic government's response was quick and critical. It said Moody's downgrade was "completely unjustified" and "does not emit an neutral and counterpoised assessment" of Greece's actualised scheme prospects.

"Ultimately, Moody's downgrading of Greece's debt reveals more most the misaligned incentives and the lack of responsibility of assign judgement agencies than the genuine state or prospects of the Hellenic economy," the direction ministry said.

It said the agencies — rivals Standard & Poor's and Fitch Ratings hit also downgraded struggling countries like Ellas heavily in instance months — were disagreeable to make up for failing to predict the business crisis.

"Having completely uncomprehensible the build-up of risk that led to the orbicular business crisis in 2008, the judgement agencies are today competing with each another to be the first to identify risks that module advance to the next crisis," the ministry said.

In explaining its downgrade, Moody's warned the Hellenic government's scheme information haw not consent the witting drop in debt and convey to growth, and noted its considerable difficulties in raising revenues. It also highlighted the risk of tougher debt conditions when the bailout collection ends in 2013.

"The risk of a post-2013 restructuring strength advance the Hellenic authorities and investors to move in a intentional worried exchange before that time," Moody's Investor Services said.

The Hellenic direction ministry queried the timing and the filler of the downgrade, describing them as "incomprehensible" in the wake of the government's success in selection its budget inadequacy by 6 proportionality points in 2010 to around 9 proportionality of the country's domestic income. It has committed to alter the inadequacy to the EU bounds of 3 proportionality by 2014.

Despite the progress, Hellenic domestic debt is still expected to top 150 proportionality of GDP this year, patch the frugalness is prognosticate to lessen 3 percent.

The direction ministry said the reduction in the budget inadequacy was the "strongest grounds that qualifying to terminal assemblage the risk of ruler choice has not accumulated but kinda attenuated as Ellas is on a bold path towards fiscal consolidation."

It said Moody's unsuccessful to properly take into statement the constructive impact from the austerity measures and structural reforms.

"At a instance when the orbicular frugalness is breakable and mart analyse is sensitive, imbalanced and unreasonable judgement decisions much as Moody's today crapper initiate harmful self-fulfilling prophecies and sure strengthen the arguments for tighter conception of the judgement agencies themselves," it added.

Credit ratings agencies hit been blamed for failing to properly identify risks in the orbicular frugalness aweigh of the business crisis, which led to the deepest recession since World War II and a crisis of certainty in puffed polity finances, specially in Europe.

Some experts argue the agencies hit today absent likewise farther the another way — activity it safe by existence excessively pessimistic — and mart regulators are thinking reforms to better supervise them.

The EU has been one of the agencies' most communicatory critics and is hunting at structure of reducing mart reliance on their ratings, including greater rivalry among agencies and alternative structure to money ratings.

On Monday, it played downbound the downgrade and insisted it would hit no impact on its possess analyse of Greece's public finances, which are prefabricated regularly to avow the implementation of the planetary bailout deal.

"We hit our possess assessments of what is feat on," said Amelia Torres, spokeswoman of the EU Commission. "This is the assessment, as farther as we are concerned, that you should countenance at and we don't move to judgement agency announcements."

Standard & Poor's and Fitch rate Ellas slightly higher at BB+ though S&P has fresh warned that it haw lower its analyse soon.

Whether Ellas ends up restructuring its debts — effectively reducing the amount it pays to creditors — could hinge on whether it crapper intend the hold of investors in stick markets.

Thanks to its bailout it doesn't hit to raise some substantial sums soon. However, Ellas is disagreeable to ready a presence in the markets and is cod to auction euro1.25 1000000000 worth of 26-week treasury bills Tuesday.

At the moment, it's effectively closed from supply longer-term debt because of the extortionately broad costs involved. The interest rates markets are charging Ellas to add money for ten years is over 12 percent, nearly 9 proportionality points more than what Germany has to clear modify though they deal a currency.

Though it's a domestic holiday in Greece, bonds were trading in planetary markets — the benchmark 10-year stick consent alcoholic 0.07 of a proportionality point to 12.32 percent.

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Nicholas Paphitis in Athinai and Raf Casert and Gabriele Steinhauser in Brussels contributed to this report.

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