Selective Default: Greece in the spotlight again

ATHENS: Greece heads to another EU summit next week on fresh aid for its debt-wracked economy after evoking — before pulling back — the thorny notion of a selective default that could unleash a eurozone storm. The term is understood to mean a pick-and-choose approach to a country’s maturing debt, with a government arranging to delay repayment on certain obligations while continuing to fully honour others. But to many investors, and more importantly to credit rating agencies that have already demoted Greece’s bonds to junk status, these are just semantics. Regardless of the outcome, Greece officially entered “uncharted territory” this week, a senior banker told AFP. Eurozone nations will hold a summit on July 21 in Brussels on ways to tackle the debt crisis.

Published in The Express Tribune, July 17^th, 2011.