UPDATE 1-Fitch: Greek outlook stays negative despite EU deal

* Fitch keeps Greece’s BBB+ rating on negative outlook

* EU safety net positive but opaque, does not lessen risks

* Uncertainty remains over medium-term fiscal adjustment

(adds quotes, details)

ATHENS, March 29 (BestGrowthStock) – Fitch will keep its negative
outlook on Greece’s BBB+ debt rating because uncertainty over
economic and fiscal adjustment remains, despite a safety net
agreed by EU leaders last week, the firm said on Monday.

The move follows similar announcements by the two other
major rating agencies, Standard and Poor’s and Moody’s, which
said last week their ratings and outlooks were unaffected by the
prospect of potential EU help.

“The (EU) statement was positive for Greece’s credit profile
by enhancing its near-term financing options and flexibility as
well as reaffirming the support of euro area member states for
economic and fiscal reform in Greece,” Fitch said in a
statement.

“Nonetheless, the rating outlook remains negative because of
continued uncertainty over the medium-term economic and fiscal
adjustment, as well as the continuing lack of clarity over the
fiscal financing strategy.”

The 16-nation single currency area last week decided to
establish a European-IMF support mechanism as a last resort.
Debt-laden Greece would only qualify for assistance if it were
unable to borrow on the markets and it would take a unanimous
euro zone decision to trigger a rescue.

Fitch said the statement was significant in clarifying the
willingness of Greece’s euro area partners to act as a lender of
last resort and to support an IMF programme if required, but
that the mechanism remained opaque and conditional.

“Thus while the statement is important, it does not in
itself materially lessen the risks associated with the
implementation of Greece’s fiscal consolidation programme and
requirement on the Greek government to raise substantial funds
in the coming weeks as well as over the medium-term,” it said.

Standard and Poor’s rates Greek debt at BBB+, and Moody’s at
A2. Both have a negative outlook. [ID:nWNA6940] [ID:nWLB0996]

For a full text of Fitch statement click [ID:nWNA7050]

Stock Market

(Reporting by Ingrid Melander; Editing by Ron Askew)

UPDATE 1-Fitch: Greek outlook stays negative despite EU deal