Moritz Kraemer, head of sovereign ratings at Standard & Poor's, believes Greece will be forced to restructure its debt again, but the ECB is pushing for further changes.
Speaking at an event at the London School of Economics last night, Kramer said he believes Greece will need to enlist the help of bailout partners such as the International Monetary Fund this time. On the possibility of further restructuring, he said::
I'm not making a prediction today when that will be….When that time comes, the official creditors will probably have to jump in the boat.
Perhaps he was alluding to the Titanic.
Greek dictator Lucas Papademos managed to get parliamentary approval for his latest €130 billion bailout package of suicidal austerity measures just over a week ago.
Nonetheless, it is not surprising that Greece is still struggling to raise funds in the market at reasonable interest rates. The situation is not helped by institutions like the European Central Bank insisting on prioritizing Greece's outstanding debt, putting ordinary bondholders at more risk and, as a result, calling for higher interest rates.
Speaking at the event, the IMF's Poul Thomsen said it would take at least 10 years for Greece to complete its reconstruction, and ECB Governing Council member Jörg Asmussen went even further.
Without a broader political consensus in support of changes to policy delivery and painful but necessary reforms, the plan risks being derailed. Political courage is needed now more than ever.
This comment from the ECB is interesting as Greece has already experienced a change of government once.
