Fitch downgrades Greece to 'B+'

One year into its multi-million European Union - International Monetary Fund bailout, Greece is struggling with weak revenues and a deep recession, fuelling speculation that it will have to restructure its debt to pull itself out of the fiscal mess that triggered a euro zone crisis.

"The rating downgrade reflects the scale of the challenge facing Greece in implementing a radical fiscal and structural reform program necessary to secure solvency of the state and the foundations for sustained economic recovery," Fitch said in a statement.

The three-notch cut to 'B+' with a negative outlook takes Fitch's rating into "highly speculative" territory, broadly in line with Standard & Poor's 'B' rating and Moody's 'B1' grade. Both have also warned they could drag it deeper into junk.

Greece said the decision was influenced by "intense rumors" in the press at a time when Greece's program was being assessed by its lenders, and ignored new pledges.

"It overlooks the additional commitments already undertaken by the Greek government to meet its 2011 fiscal targets and speed up its privatization program," the Finance Ministry said in a statement.

But Fitch said implementation and political risks have risen as further austerity measures were required to meet the 2011 budget deficit target of 7.5 percent of GDP.

"In the absence of a fully funded and credible EU/IMF program, the rating would likely fall into the 'CCC' category indicating that a Greek sovereign debt default was highly likely," Fitch said.