The process of private sector involvement in reducing Greece’s debt burden was a “disaster”, the head of global sovereign ratings at Fitch said Thursday, warning that if talks on the cut creditors will take on their debt holding fail to conclude, this will pose a major risk to the euro zone.
The implementation of private sector involvement, or PSI, in Greece was ” frankly a disaster,” David Riley said at a conference in Paris.
The PSI process in Greece has had a lasting impact for the entire euro zone, as sovereign default and restructuring were brought to the table, Riley said.
“Our fear is that the genie is out of the bottle and it’s very difficult to put that back in. One of the major potential negative shocks [for the euro zone] is if the whole PSI exercise in Greece is mishandled, or they are not able to reach agreement or unlock additional support,” he said.
(source: Dow Jones)