Greece Denies New Bailout as Markets, Rating Agencies React

Ratings agencies took their actions in the wake of that acknowledgement by European Union (EU) officials that not only would Greece need another bailout, but that they were also considering easier terms for Athens and lower interest rates for Ireland as well. AdvisorOne reported on Monday first, that a new rescue was in the works, as Greece denied plans to leave the euro zone, and second, that the country fell to a B rating, with Moody's Investors Service placing the rating on review. Fitch Ratings would not comment on a German newspaper report that it planned to slash the country's rating this week.

Mark Weisbrot, the co-director of the progressive Center for Economic and Policy Research, said in a Tuesday op-ed in the Times that the best course for Greece would be to leave the euro zone so that, instead of facing years of austerity, it would have the opportunity to grow its economy out of crisis. Weisbrot cited Argentina as an example of how such an action might work. Argentina defaulted on its debts to the International Monetary Fund (IMF) and severed its currency's connection to the U.S. dollar.

"Most economists and the business press predicted that years of disaster would ensue," he wrote. "But the economy shrank for just one more quarter after the devaluation and default; it then grew 63% over the next six years."