Greece furious after credit rating cut

Greek Prime Minister George Papandreou has slammed the "unacceptable logic" of debt rating companies who have repeatedly downgraded the sovereign and bank standings of weak European economies in the past week.

"Because of the crisis in the eurozone, we have a barrage from rating houses who downgrade countries or place them on negative watch," Papandreou told a cabinet meeting, according to his office.

"This is an unacceptable logic on their part," he said, noting that the same companies had given top marks to US banks shortly before the collapse of toxic subprime loans that sparked the global economic crisis.

Greece has reeled in recent months from repeated downgrades from prominent rating companies Moody's, Fitch and Standard and Poor's that made it impossible for the debt-hit country to raise fresh money on the open market.

Struggling with a massive public deficit and unable to generate growth, Greece was forced in May to call for a massive loan from the European Union and the International Monetary Fund, pledging a major economic overhaul in return.

The painful austerity drive has brought widespread pay and pension cuts and thousands of layoffs while the economy is sinking deeper into recession.

So far, the government has managed to slash the public deficit by an unprecedented six percent of output and is hoping to convince investors that it means business about cleaning up the Greek economy.

But last week, Moody's said it might further lower its rating on Greek sovereign debt, which is almost at junk level for investors, and followed the warning with a similar statement for six Greek banks.

On Monday, Moody's slashed its ratings on five Irish banks following its downgrade of Ireland's sovereign debt last week when it also threatened to also cut Spain's credit rating.

"They downplay the great efforts of entire peoples and answer to no one," said Papandreou, who has led calls at European level for greater scrutiny of the ratings agencies.