The European Union would fight any suggestion of debt restructuring by Greece, because it would imply a failure of the bloc’s bailout plan, Royal Bank of Scotland Group Plc said.
“Even a voluntary restructuring should be seen as a disaster,” Harvinder Sian, a senior bond strategist at RBS in London, wrote in an e-mailed report today. “It would mean the failure of the EU to buy Greece time, a prelude to evenutal Greek default and then EMU breakup. The big picture would be horrendous.”
Investors should retain “short-end Greek government bonds,” Sian said. Any default risk will be “delayed for several more quarters at a minimum,” he said.
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