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NEW YORK (Reuters) – Greece will likely fail to achieve sustainable debt levels if it only resorts to a 70 percent reduction in the value of bonds held by private creditors, Standard Poor’s warned on Wednesday, putting pressure on the ECB to also take losses.
Private-sector bond holders currently account for only a small part of Greece’s creditors since most of the country’s debt has migrated to the hands of the European Central Bank and other official institutions, SP analyst Frank Gill said in a webcast with clients.
Though pressure on the ECB to take losses on its holdings is rising, policymakers remain divided on what contribution the bank could make to the debt restructuring, two euro zone monetary policy sources said.
If Greece had negotiated losses of 50 percent to 70 percent with private creditors two years ago, then it would have been able to put its public debt in a “far more sustainable level,” Gill
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