Green light from the European Central Bank to the hypothesis of having the European Anti-Crisis Fund (FESF) buy Greek government bonds already traded on the market. Juergen Stark assured this: “I wouldn't see any risks of credit incidents or rating cuts – said the chief economist of the ECB in an interview with Boersen Zeitung -. The ECB has always asked that the EFSF's capabilities be extended to the possibility of operating in the secondary market".
This would be the alternative route to the notorious controlled default, which would lead Greece to declare insolvency on payments, albeit in a limited and pre-established way. The Frankfurt institution has always opposed a solution of this type, because it would create an "accident" (or "credit event") on the debts, which could be heavily penalized by the rating agencies.
If, on the other hand, “the EFSF fund bought Greek bonds on the secondary market at current prices, which are very low – Stark explained -, then the private sector would implicitly participate in the discount, because it would not recover the nominal value of the bond. But as long as investors sell their bonds voluntarily, and the EFSF buys them for cash and holds them to maturity, I see no risk of debt crashes or rating cuts.
