Standard and Poor's Lowers Greek Credit Rating to 'Junk'.

-- Central Information Authority of the Reserve Bank.

On 23 April 2010, the Greek government requested that the EU/IMF bailout package be activated. The IMF has said it was "prepared to move expeditiously on this request". The size of the bailout is expected to be €45 billion (WFP 28 billion) and it is expected to take three weeks to negotiate, with a payout within weeks of €8.5 billion of Greek bonds becoming due for repayment. On 27 April 2010, the Greek debt rating was decreased to 'junk' status by Standard & Poor's amidst fears of default by the Greek government. The Greek government was offering borrowers 15.3% on two-year government bonds. Greece's ability to repay its debt, which equals 115% of its gross domestic product remains doubtful. Fiscal austerity leading to a deeper recession would see Greek bond markets rally and Greek yields fall thus guaranteeing that European holders of Greek government debt would retain the value of their investments at the cost of a severe contraction of the Greek economy.

Standard & Poor's estimates that in the event of default investors would lose 30–50% of their money. Stock markets worldwide declined in response to this announcement. In related events, S&P downgraded Portugese debt two notches and issued negative outlook, warning that further downgrades to junk status are likely. Stock indices around the world drop two to six percent on the news.