–Says EU Is Buying Time, Reducing Spillover Effects Hopefully
–Filling Greece Financing Gap Is Main Challenge And Unresolved
LONDON (MNI) – Standard & Poor’s Managing Director Sovereign Moritz
Kraemer Ratings today lamented what he sees as a fundamental lack of
progress in euro zone talks on resolving the Greek debt crisis.
Speaking at the Euromoney Global Borrowers and Investors conference
here, Kraemer said:
“We must remember why these conversations are happening and it is
because there’s a gap in the financial program for the last year and how
we fill that gap is the main challenge and that still remains
unresolved,” Kraemer said.
“This is not over. There will be more summits and more summits
still. The time that is being bought is actually precious, it’s
reducing, hopefully, the spillover effects but there is no real
fundamental news that came out over the weekend”.
Kraemer also went into what S&P would regard as constituting a
Greek default, suggesting that the ratings agencies could take a
strict approach to what constitutes a Greek default:
“We have to see what options are put on table to see whether they’d
constitute a default,” he said.
“The key question is whether bond holders receive what was promised
on issuance,” he continued.
“We have to able to assess the actual options that are on the table
which are now still a work in progress (on what would constitute a
default),” he said.
“The question really fundamentally is, is the bond holder receiving
the payment that was promised at the time of issuance? If they are paid
in bonds of some other institution or some other currency or a different
day, that’s a default….They’re not adhering to the contract that was
agreed,” Kraemer said.
–London Bureau; Tel: +442078627492; email: dthomas@marketnews.com
[TOPICS: MGX$$$,MFX$$$,M$X$$$,MR$$$$]
