European markets were under pressure after Standard & Poor's lowered Greece's credit rating further into junk territory on growing fears that Athens may need to restructure its debt.
Moody's too announced that it would put Greece on review for a potential downgrade of its current B1 rating.
Meanwhile the euro edged off a three-week low against the US dollar, though the gains were short-lived as worries resurfaced about the Eurozone's heavily indebted economies.
CNBC-TV18's Menaka Doshi caught up with Silvia Ardagna, senior economist (Europe) at Bank of America Merrill Lynch to find out her views on where things are headed in the Eurozone. Below is a verbatim transcript of the interview. Also watch the video. Q: What exactly has gone wrong with Greece? It's a year now since it got its first bailout and it doesn't seem to be been able to do much with that bailout, now asking for better terms or a second rescue?
A: I have a different take on Greece. They have done quite a lot so far in terms of fiscal adjustment. They have done a very big adjustment this year of the order of eight percentage point in structural term. The problem with Greece is that their initial conditions were difficult and they were made even more so by the revision of the past data. Going forward, it is the official position that the ECB, the EU and IMF have taken to give Greece more time and push for more fiscal and structural reforms is still might baseline scenario in which relies the ability of this economy to rebuild its macro fundamentals and be able to walk by itself in the future. Q: Are you in the denial of the fact that Greece has asked for better terms or a second rescue so to speak and there are now an increasing number of voices saying that Greece will in fact have to restructure its debt? Let me take you through what the S&P had to say today,
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