2011-07-25 16:35

Finance ministers Michael Noonan of Ireland, Evangelos Venizelos of Greece, Elena Salgado of Spain, and Francois Baroin of France (L-R) sign the treaty establishing the European Stability Mechanism before a euro zone finance ministers meeting in Brussels July 11, 2011.  [Photo/Agencies]

LONDON - Moody's has warned that it's almost inevitable that Greece will be considered to be in default of its debts as it slashed the country's credit rating further following last week's second bailout package.

The agency said Monday that last week's EU package of measures implies "substantial" losses for private creditors. As a result, it cut its rating on Greece by three notches to Ca - one above what it considers a default rating.

Though Moody's said a Greek debt default is "virtually 100 percent," it noted that the package of measures will increase the likelihood that Greece will be able to stabilize and eventually reduce its overall debt burden.