Moody’s says gov’t debt restructuring unlikely
A week after Moody’s reduced Greek government bonds to junk status, the rating agency said yesterday that it’s very unlikely that Greece will restructure its debt. Bart Oosterveld, managing director at Moody’s Investors Service Sovereign Risk Unit, said in Singapore that a restructuring of debt in the short term would be «very hard» to expect. «We think it’s a low probability but not inconceivable» in the medium term, said Oosterveld. Moody’s slashed its credit rating on Greek government bonds to Ba1, or junk status, from A3. European Central Bank governing council member Christian Noyer, also governor of the Bank of France, earlier this week said Moody’s decision to downgrade Greece’s rating was «incomprehensible» and that the subsequent market drop had been «counterproductive.» Meanwhile, the head of the Public Debt Management Agency (PDMA), Petros Christo-doulou, said in London yesterday that the rescue package to aid Greece’s debt problem has given the country the luxury of time to implement austerity measures and focus on fiscal consolidation. Christodoulou also told a Euromoney Conference in London there was a shift in the investor ownership of its paper following successive downgrades of its credit ratings. «Greece has the luxury of time at this stage and can afford to concentrate on implementing the changes in Greece that will bring along fiscal consolidation and reshape the whole economy,» he said.
