MercoPress. South Atlantic News Agency

Rating agencies forecast Greece’s default…but in an orderly manner

Like in Colombian Nobel Prize Gabriel Garcia Marquez novel “Chronicle of a Death Foretold” Fitch rating agency said on Tuesday that Greece would default on its debt, although it anticipated that such a default was likely to take place in an orderly manner.

“It is going to happen. Greece is insolvent so it will default,” Edward Parker, Managing Director for Fitch's Sovereign and Supranational Group in Europe, the Middle East and Africa told reporters on the sidelines of a conference in the Swedish capital.

“So in that sense it shouldn't be a surprise to anyone.”

The Fitch comments come after Moritz Kraemer, head of Standard & Poor's rating agency's European sovereign ratings unit, said on Monday Greece would default shortly on its debt obligations.

Parker said that Fitch believed that even a voluntary agreement by private investors to take a haircut on Greek debt would constitute a default.

“We have said for a long time that we don't think this PSI is the way to go and we would treat it as a default. It clearly is a default, however they try to spin it,” he said.

Parker said the worst result would be a disorderly default.

”That would be, for us, the really damaging situation, but one which we are certainly not expecting to happen because, clearly, in a rational situation you would think Greek politicians and European policy makers would ensure that it doesn't happen.