Chinese Dagong Rating Agency Downgrades Greece's Credit Rating to Negative

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China's Dagong Global Credit Rating agency downgraded Greece’s local and foreign currency sovereign credits to negative on Monday following the country’s "no" vote in the referendum on its creditors’ cash-for-cuts proposal.

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MOSCOW (Sputnik) – Over 61 percent of Greek voters rejected Greece's international creditors’ demands, including tax hikes and pension reform, in exchange for fresh financial loans on Sunday.

Dagong cited uncertainty in Greece’s political environment, the banking system’s declining liquidity, as well as impending recession and the risk of default as the main reasons behind its decision.

"Greece is very likely to default on its commercial debts," the agency said in a press release.

Although Greek Prime Minister Alexis Tsipras’ administration hailed Sunday’s plebiscite as a triumph for democracy, Eurogroup President Jeroen Dijsselbloem called its results "regrettable."

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Talks between Greece and its main creditors — the Eurogroup, the European Central Bank (ECB) and the International Monetary Fund (IMF) — broke down two weeks ago, leading to Athens’ failure to make a $1.7-billion debt repayment to the IMF last Tuesday and the snap-referendum.

"Although the government is trying to prevent the financial system from collapsing by taking capital control, closing banks and capping residents’ withdrawal amount, the banking system, short of external liquidity support, is running out of liquidity," Dagong concluded.

Dijsselbloem’s spokesman announced an emergency Euro summit for Tuesday, following the results of the vote, while the country's outspoken Finance Minister Yanis Varoufakis has announced his resignation, to clear the way for possible future negotiations to progress further.

Major banks, including Barclay’s, J.P. Morgan and Citi, are said to be bracing themselves for a possible Greek exit from the Eurozone.

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