The rating agency said Thursday it may downgrade Greece’s credit ratings again, just five months after it cut the country’s bonds to junk, in the latest sign that mere austerity is no match for a massive debt overhang.

Moody’s cited weak government revenue trends, a surprisingly large recent rise in reported debt levels and rising questions about whether Europe will stand behind Greece.

Touchingly, the firm congratulated Greece for trying to turn its act around, improving its budget balance by some 6% of GDP. But there are discouraging signs, sovereign analyst Sarah Carlson said in a press release, that even really fierce belt-tightening may not pay off.

“Greece has made significant progress in implementing a very large fiscal consolidation effort,” she said. “However, the challenge of reducing debt to sustainable levels has also become greater due to both domestic and regional developments.”

She said those developments – notably a 12-percentage-point rise in its debt outstanding as a share of economic output, to 127%, and a failure to hit government revenue targets set last year — call into question the country’s capacity to grow out of its debt problem.

“Moody’s review will focus on the factors, namely nominal growth and fiscal consolidation, that will drive the country’s debt dynamics over the next few years,” the rating agency said.

Moody’s has been busy this week, warning first that the tax cuts being voted on in Congress this week won’t help the dreary U.S. fiscal picture and then that a downgrade of another troubled European state, Spain, may soon be necessary.

But unlike the United States, which retains its triple-A rating, or Spain, which is rated Aa, Greece could face a multi-notch downgrade that would take it from the current Ba1 to the netherworld of the junk bond world.