BERLIN — German Chancellor Angela Merkel backed down Friday from insisting that private investors shoulder part of any further bailout for Greece, easing fears that the financially struggling nation would default on its debt.
But it remained to be seen whether ratings agencies would go along with a new proposal asking investors to volunteer to wait until Greece has stabilized its economy before demanding debt payments.
?Cutbacks demanded by international lenders have led to a public backlash, with tens of thousands of Greeks flooding into the main squares of cities across the country.
The plan, which Merkel announced with French President Nicolas Sarkozy on Friday, would encourage but not require private investors to give Greece more time to repay its $420 billion debt. But ratings agencies could consider even a voluntary acceptance of losses by investors as a default, analysts said, potentially setting off a chain reaction of financial crises for banks and economies throughout Europe and ripple effects around the world.
Germany’s concession appeared to ease a weeks-long standoff over how generous to be toward private investors, pitting Germany against France, the European Central Bank and much of the rest of Europe.
More here: Germany, France strike deal on Greek bailout – The Washington Post.
