Greece: rating agencies must play second fiddle, says Merkel
Rating agencies must play second fiddle to the EU, the European Central Bank and the IMF when it comes to deciding the fate of debt-ridden Greece, German Chancellor Angela Merkel said on Tuesday.
"I think it's important that we in the Troika -- the International Monetary Fund, the European Central Bank and the European Commission -- don't allow ourselves to relinquish our freedom to judge," she told reporters at a news conference.
"That's why I trust in the evaluations of these three institutions when it comes to specific procedures" rather than those of rating agencies, she said.
Germany and France have been at the forefront of European efforts to bail out Greece while rating agencies have warned this could amount to a debt default.
The rating agency Standard and Poor's warned on Monday that French proposals to involve private creditor banks in rolling over loans to Greek risked putting Greece into a selective default.
"It is our view that each of the two financing options described in the (French) proposal would likely amount to a default under our criteria," a statement said.
The proposals centre on voluntary renewal by the private banks of debt, in the form of bonds, of from five to 30 years that would give Athens some breathing space without actually reducing the amount it owes creditors.
The main point of the exercise is to ease the burden on Greece while avoiding at all costs triggering a debt default which would be disastrous for the country and the wider eurozone.
The European Commission, the European Central Bank and the IMF have said they will determine, along with Greece, what is needed to stabilise Greek finances, a measure all the more important as Greece shares the euro as a common currency with 16 other partners in Europe.
© 2011 AFP