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Standard & Poor's warns of final termination of negotiations between Greece and its private creditors

15 January 2012 / 13:01:47  GRReporter
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The largest credit rating agency Standard & Poor's expressed concerns that the negotiations between Greece and its private creditors can be terminated. During a conference call expert Moritz Kraemer, presented the arguments of the agency regarding the reduction of the credit ratings of 9 countries in the Eurozone and expressed his concern about the outcome of the meeting between the Executive Director of the Institute of International Finance Charles Dallara and the Greek Prime Minister Lucas Papademos, which took place on Friday.

Moritz Kraemer spoke very critically on the management of the Eurozone and Europe as a whole, which is unable to conclusively meet the challenges of the economic crisis. "The political environment around the Euro does not stand up to the challenges of the crisis," were his words. Soon Standard & Poor's will announce its assessment of the European Financial Stability Fund (EFSF), which most likely will not be AAA. The Fund needs triple A in order to be able to borrow money from international markets at lower interest rates. "We have taken into account the possible collapse of the Eurozone," said Moritz Kraemer on the occasion of Standard & Poor's decision taken on Friday regarding the credit ratings in the Eurozone.

Greek Finance Minister Evangelos Venizelos was optimistic, as always, regarding the outcome of the negotiations with private creditors and in an interview for the Financial Times he said: "I am convinced that we will overcome our differences and logic will prevail in the interests of Greece." He stressed that the aim of the Greek government is to regain market confidence, to change the psychology of investors and for deposits to be returned to Greek banks.

Meanwhile, Mega TV correspondent in Washington Michalis Ignatiou reported in his Twitter page that in fact the differences with private creditors are really the interest rates and they demand that they vary between 5 and 5.3 percent. Germany, however, disagrees and insists that the interest rate is less than 3 percent. For its part, the International Monetary Fund also presses Greece for lower interest rates in order to make servicing of the Greek debt possible. As for the possible resumption of negotiations, which ended miserably on Friday, Michalis Ignatiou reported that right now Charles Dallara is on a short vacation in Miami and any contacts with him are made only over the phone.

However, European leaders cannot afford the luxury of rest and German Foreign Minister Guido Westerwelle will arrive in Athens today. He will meet with Prime Minister Lucas Papademos, Foreign Minister Stavros Dimas and Finance Minister Evangelos Venizelos, from whom he will require to be tough with private creditors.

Tags: Greek debt Charles Dallara Guido Westerwelle IMF PSI
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