8 Greek banks downgraded by Moody's

Ratings agency Moody's Investors Service downgraded eight Greek banks by two notches Friday, on the grounds they are highly exposed to their government's massive debt and because of the deterioration of the Greek economy.

Moody's lowered its assessment of the creditworthiness of National Bank of Greece, EFG Eurobank Ergasias, Alpha Bank, Piraeus Bank, Agricultural Bank of Greece and Attica Bank CAA2.

While also downgrading Emporiki Bank of Greece and General Bank of Greece, which are majority-owned by France's Credit Agricole and Socit Gnrale respectively, to B3 from B1, Moody's said their parent companiescontinue to provide strong support.

As a result, their ratings are three notches higher than the others.

But Moodys warned further downgrades could come.

Greece has been kept afloat only by a110 billion ($153 billion Cdn) bailout in 2010 from other eurozone countries and the International Monetary Fund.

But it needed another massive bailout this summer, and has angered international creditors by lagging behind in commitments to implementing reforms.

In other developments in Europes debt crisis Friday:

• German finance minister Wolfgang Schaeuble said a second,109 billion ($151 billion), bailout package for Greece may have to be re-evaluated amid disagreement over whether the debt-ridden country was doing enough to meet its promised deficit reduction targets.
• Dutch central bank president Klaas Knot said he could no longer rule out the possibility that Greece will default, something that poses a threat to the stability of Europes banking system.
• Metro, tram and train workers in Athens went on strike Friday in protest against government spending cuts. All public transport workers and taxi drivers are to hold a 48-hour strike next week and a nationwide general strike is set for Oct. 19.
• Spain approved the sale of a third of the state-owned company that runs the country's lotteries, raising a reported7 billion ($9.7 billion) as the country tries to reduce its debt. The company is best known for its lucrative Christmas lottery known as El Gordo, or the fat one.