Greece: Ratings agency says latest bail out plans still amount to a default

4th July 2011

The Financial Times (paywall) website has reported that proposals aimed at providing up to €30bn ($43.6bn) in financing for Greece had been made conditional on rating agencies not downgrading Greece's debt.

But S&P said on Monday that any rollover would be a "distressed" transaction and would lead it to lower Greece's rating as selective default.

Last month the third-largest rating agency, Fitch said it would declare Greece to be in default if commercial banks agree to roll loans over.

Over the weekend, the European Union warned Greek growth would seriously contract over the rest of the year.

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