Greece is insolvent and probably
won’t be able to honor a bond payment in March as the country
negotiates with creditors to cut its debt burden, Fitch Ratings
Managing Director Edward Parker said.
The euro area’s most indebted country is unlikely to be
able to honor a March 20 bond payment of 14.5 billion euros ($18
billion), Parker said today in an interview in Stockholm.
Efforts to arrange a private sector deal on how to handle
Greece’s obligations would constitute a default, he said.
Prime Minister Lucas Papademos is scheduled to meet
tomorrow with a group representing private bondholders after a
five-day break to hold talks on forgiving at least 50 percent of
the nation’s debt in the euro area’s first sovereign
restructuring. Greece’s official creditors begin talks Jan. 20
on spending curbs and budget cuts that will determine whether to
disburse additional aid.
“The so-called private sector involvement, for us, would
count as a default, it clearly is a default in our book,”
Parker said. “So it won’t be a surprise when the Greek default
actually happens and we expect it one way or the other to be
relatively soon.”
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