06/07/2011
Merkel rebuffs rating agencies on Greece
German Chancellor Angela Merkel is pictured through a window as she waits to welcome the Chairman of the Commission of the African Union Jean Ping at the Chancellery in Berlin. (Reuters)
BERLIN: German Chancellor Angela Merkel is warning against putting too much weight on rating agencies’ assessments of the new bailout plan for Greece that will see private creditors share part of the burden.
She said it was important that the institutions helping Greece — the International Monetary Fund, the European Central Bank and the EU Commission — make their own assessment.
Her comments Tuesday come a day after Standard & Poor’s said the current French proposal to have banks rollover their Greek debt holdings “would likely amount to a default.” If the leading rating agencies were to consider Greece as a so-called “selective default,” the move could trigger insurance claims on Greek bonds and cause another bout of turmoil in the financial markets.
