Fitch: Greek Deal to put the country in default

Brussels (AP) - Greece will be governed by default on its debt of a new plan of the euro area investors to take losses on the obligations of the country, credit rating agency Fitch said Friday.However, the move is unlikely to trigger payment of bond insurance - facilitating a major concern for the Greek and European leaders seeking to contain the crisis of the debt of the continent.The new rescue plan includes asking bondholders to accept new debt with lower interest rates and a refund in 30 years to help reduce the burden of the debt of the country and give him the time to reform its economy. The decline in the rate over time will result in loss of investment for the holders of bonds.When the debtor pursuant to a loan to a disadvantage creditors, it is considered as in default and European leaders knew that their plan would probably force the demotion.But remain in default the Greece - is expected to occur in the fall - will probably be brief. Fitch Ratings said Friday that he can pass it to junk level as soon as it issues new bonds of replacement. That could take only days, if not hours.Lack of government debt is relatively common among the poorest countries, but this instance would be a first for a member of the euro area rich and a blow to the prestige of the common currency. The Greece will join countries such as the Ecuador, Uruguay and the Ukraine, who have defaulted in recent years. Still, many economists have been saying for months that it is inevitable since the debt burden of the Greece is too large to pay and a way must be reduced.Anxiety of moderation on the immediate effect of the default value, an organization of trade financial derivatives, said that the new contract of rescue for the Greece should not lead to payments of credit default swap.Jump in insurance payments can be potentially massive and would have threatened the banking sectors, in Greece and in Europe. "A proposal for a voluntary debt Exchange... because it is expressly voluntary, it should not trigger CDS,"David Geen, General Counsel to the New York International Swaps and Derivatives Association based, wrote in an email from London.Fitch said that the holders of bonds involved in the Greece would lose about 20% of the value of their investments under the agreement reached Thursday night", a vast plan 109 billion euros ($156 billion) which gives the Greece of new loans, supports Greek banks and reductions in the rate of interest on credits of rescue.It also funds of rescue of the euro area to act quickly to help countries in trouble to try to prevent the crisis multiply since already made to the Greece of Portugal and Ireland to the large countries such as Spain and Italy.The Agency said that, as soon as the period of the offer for the new, more long term bonds closes, Greece will get a "default" rating limited Once the new debt is actually issued, Greece would probably get a new dimension in the area of low grade speculative. New bonds would be guaranteed by the Governments of the euro area.European officials have resisted the idea of leaving the default value of the Greece on its debts for most of the debt crisis of 21 months which begins when a new Government has revealed the extent of the financial problems of the country. But a rescue of 110 billion euros ($156 billion) in the form of loans in the euro area and the Monetary Fund International last year did not put the country back on its feet.The new deal to reduce the size of the debts of the Greece, which many economists say are too big to be paid any additional credit the country gets. Greece to some EUR 340 billion at the end of last year, or 143% of economic output. This figure should reach 160% as the struggles of country to close its trade deficit during a deep recession.___Derek Gatopoulos in Athens contributed to this report.