Rating agency Fitch said on Tuesday that Greece would default on its debt, although it said that such a default was likely to take place in an orderly manner. ”It is going to happen. Greece is insolvent so it will default,” Edward Parker, Managing Director for Fitch΄s Sovereign and Supranational Group in Europe, the Middle East and Africa told Reuters on the sidelines of a conference in the Swedish capital.
“So in that sense it shouldn΄t be a surprise to anyone.”
The Fitch comments come after Moritz Kraemer, head of Standard & Poor΄s rating agency΄s European sovereign ratings unit, said on Monday that Greece would soon default on its debt obligations. Parker said that Fitch believed that even a voluntary agreement by private investors to take a haircut on Greek debt would constitute a default.
“We have said for a long time that we don΄t think this PSI is the way to go and we would treat it as a default. It clearly is a default, however they try to spin it,” he said.
Parker said the worst result would be a disorderly default.
“That, would be, for us, the really damaging situation, but one which we are certainly not expecting to happen because, clearly, in a rational situation you would think Greek politicians and European policy makers would ensure that it doesn΄t happen.”
(source: capital)
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