Moody's cut its rating on Greece's debt to junk today.
The downgrade is less surprising than the fact that Greece kept its investment-grade rating from Moody's until now. S&P cut Greece to junk in April.
"Greece had been trading as junk for a while," a currency strategist at BNP Paribas told the WSJ today. "The agencies are only catching up to the reality markets were trading on weeks ago."
The bailout from the EU and the IMF means that Greece probably isn't going to default in the short term. And it gives Greece a few years to get its fiscal act together.
But the bailout is a loan, not a gift, so it adds to Greece's debt. To climb out of trouble, Greece will have to both cut spending and keep its economy growing -- a difficult trick to pull off.
More on European debt: Who's holding debt from Greece and other struggling European nations? The Bank for International Settlements does the math in its latest quarterly report. Calculated Risk has a summary.