July 12, 2011 / 7:35 AM / 8 years ago

Dutch finmin: Greek selective default no longer excluded

BRUSSELS, July 12 (Reuters) - A selective default of Greek debt is no longer being excluded as a possibility, Dutch Finance Minister Jan Kees de Jager said on Tuesday.

“We have managed to break the knot, a very difficult knot, of a contradictory statement that you are saying that you want substantial private sector involvement and on the other hand you want to avoid a selective default,” de Jager told reporters ahead of a meeting of European finance ministers.

“Obviously this was a contradiction. So we have broken this knot and now we can do the work in the next few weeks. The (Eurogroup) working group can prepare. It has a broader mandate, several options,” he said.

Asked if this could include the possibility of a selective default for Greek debt, he said: “It is not excluded any more. Obviously the ECB has stated in the statement that it did stick to its position, but the 17 ministers did not exclude it any more so we have more options, a broader scope to work with.”

Attempts to find a way of sharing the cost of Greece’s debt burden with private investors have so far been unsuccessful because debt rollover or extension plans would likely prompt rating agencies to place Greece in selective default — which the ECB opposes.

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