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S&P: Greek Rescue Plan Would Count as a Default
Greece got yet more bad news today, when Standard & Poors issued a statement saying that a proposed rescue plan from banks in France “would likely amount to a default” as far as it was concerned. French banks planned to roll over their holdings in the countrys debt, and German banks had said theyd consider doing the same. But S&P says that counts as defaulting, because the banks would wind up with “less value than the promise of the original securities,” according to the AP.
The statement threw cold water on European markets that had been buoyed by Greeces Austerity vote, and put a major monkey wrench in Europes rescue plans. “A default is exactly what the European politicians want to avoid,” says one market analyst. “I imagine there are a lot of phone calls being made between the European political elite and the bosses at S&P.” Even a “selective default” like this one could trigger insurance claims on Greek bonds, and wreak havoc on financial markets.
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