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.
A French plan for private banks to rollover Greek government bonds as they came due was effectively shot down this month when ratings agency Standard and Poor's said that such an arrangement would be tantamount to default.
Fellow evaluator Fitch this week also warned that "private sector involvement would likely be viewed as a sign of sovereign credit impairment and could trigger a rating default event."
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