Paris - Fitch ratings agency on Friday said it had cut Greece's long-term debt rating by one notch to BB+ from BBB-, dropping the eurozone member's debt from investment grade to speculative or "junk" level.
"The downgrade acknowledges that while Greece's economic and fiscal performance under the EU-IMF programme has in many respects exceeded expectations, its heavy public debt burden renders fiscal solvency highly vulnerable to adverse shocks," Fitch Ratings said in a statement.
Fitch warned further downgrades were possible.
Greece said the fresh downgrade by Fitch, despite major economic reforms, was proof that Europe ought to keep a closer eye on the rating agencies.
"Today's downgrade ... highlights once more the need for a new framework on rating houses at the European level," the Greek finance ministry said.
"Today's decision by Fitch comes as a result of an objection process submitted by Greece over the house's intention to make an even greater downgrade," the ministry said in a statement.
Greece has reeled in recent months from repeated downgrades from Fitch and fellow rating companies Moody's and Standard and Poor's.
In May, Greece had to seek a €110bn bailout from the European Union and International Monetary Fund after financial markets turned against it and it could no longer raise fresh funds at sustainable rates of interest.
In return for the rescue package, Greece has adopted draconian austerity measures over strong popular resistance but critics say it still has much to do to balance its public finances.