S&P does not see Greek default inevitable

Ratings agency Standard and Poor's does not consider that a Greek debt default in the near term and a breakup of the euro zone are inevitable, a senior official said on Wednesday.

David Beers, head of sovereign ratings, told a Reuters Investment Summit in London that a European Union and International Monetary Fund rescue package for Greece had bought the country time to convince markets it was sorting out its fiscal problems.

"There's nothing particularly inevitable about Greece defaulting in the near term," Beers said, pointing to the EU/IMF rescue package.

"So Greece has the space and time to show the market and also its own people ... that it is implementing a (fiscal) plan."

S&P downgraded Greek debt to junk status toward the end of April and also cut ratings for Portugal and Spain in swift moves that weighed on the euro.

Beers said S&P was not as pessimistic about the euro zone as some in the market.

"We are at this delicate period where it's very easy to be hugely pessimistic and of course if S&P shared that degree of pessimism our ratings of the euro zone would be uniformly much lower than they are right now."

[Source: Reuters, London, 09Jun10]

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