Dallara Sees Greek Selective Default As Temporary

The leading private-sector negotiator in talks over Greece΄s new bailout deal said he expects Greece will be placed in selective default by rating agencies, but it will last for only a short time.
Charles Dallara, managing director of the Institute of International Finance, said his organization, which represents more than 400 financial institutions worldwide, had spent a lot of time looking at the risks associated with Greece being declared in selective default by rating agencies
“We are quite comfortable that, given the breadth of the program and the overall improvement of the outlook for Greece, that selective default is a temporary passage for Greece that will be over fairly quickly,” he said in a telephone interview.
He said he expects the agreement to put an end “to the uncertainty swirling around the future that was hindering any capacity for the Greek economy to grow.”
He said the combination of concessions on Greece΄s official loans and “quite generous” private sector contributions is “going to give breathing space to Greece and allow the government to focus on what needs to be done at home.”
He said the next steps were to fix further technical details and explain the program to other investors.
He said the work would move as fast as possible but would probably not be concluded by mid-August, when a large repayment of a Greek benchmark bond is due. Nonetheless, there is adequate financing to repay this in full, he said.
(source: capital)