“There is considerable uncertainty regarding the outcome of the ensuing negotiations, and the ability of the two sides to reach an agreement which secures Greece’s financing position,” said Moody’s, which currently holds a deep junk-level rating of Caa1 on Greece’s government bonds.
“If the Greek government is unable to secure an agreement with official creditors in the next few weeks, the probability of default on debt issued to the private sector would rise sharply.”
The Moody’s warning came as Greece and its key creditors in Europe appeared still far apart over Athens’s demands to renegotiate its 240-billion-euro ($275-billion) bailout with the European Union and the International Monetary Fund.
The EU portion of the program is due to expire February 28, leaving just weeks for Athens and Brussels to reach a compromise or risk a default that could send Greece crashing out of the euro. (AFP)