Christine Lagarde, head of the International Monetary Fund (IMF), estimates that the Greek economy will need two years to recover from its collapse.
"Instead of frontloading heavily it is sometimes better, given the circumstances and the fact that many countries at the same time go through that same set of policies with the view of reducing their deficits, it is sometimes better to have a bit more time.
"This is what we've advocated for Portugal, this is what we've advocated for Spain and this is what we are advocating for Greece", she said.
Greece is going through a painful round of austerity and spending cuts imposed on the country in return for promised loans and debt relief worth about 347 billion euros ($448 billion). This is causing another year of recession, salary slashing and an unemployment rate of 20%, reports AFP.
S&P lowered Spain's credit rating last night to BBB, just one step above "trash".
.