Europe’s financial crisis not over

Ratings agency Moody’s downgraded Greek debt to junk status on March 7, meaning that it deems lending to Greece more risky than lending to Egypt, and just as risky as lending to Angola or Mongolia.

Spiegel Online notes that Greece’s new B1 status “has little direct effect on Athens’s finances. For now the country is being aided by EU rescue money. But it does indicate that skepticism is growing as to whether the country’s strict austerity measures combined with European aid money will be enough to stave off a restructuring of the country’s debt. Many point out that, even if Greece consolidates its budget to the degree its targets call for, sovereign debt in 2013 is still likely to be close to 150 percent of gross domestic product.”

Spain too suffered as Moody’s cut its credit rating to Aa2 on March 10.

These cuts are another reminder that Europe’s financial crisis is not over.