Greece: A Game of 'Chicken' with the ECB?

If Moody's Investors Service follows other rating agencies in downgrading Greece's debt, the nation could be in the position that its government debt may no longer be eligible as collateral in European Central Bank refinancing operations. Moody's warned on Feb.25 that "if in a few months it appears there are significant deviations from the plan [to reduce Greece's deficit], then it is pretty likely that we would adjust the rating accordingly." Such a departure could lead to a cut of "a couple of notches" from its current A2 designation.

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