Moritz Krämer, head of Standard & Poor's European sovereign ratings, said that a joint bond issue by eurozone countries would get the weakest member's rating if the issue was jointly guaranteed.
Krämer said his understanding was that joint eurobonds would be structured along the lines of Germany's jumbo bonds, in which federal states team up to issue debt and each guarantees its own bit. He stressed that S&P was not in talks with the European Union about the idea because that would present a potential conflict of interest.
He said: “If the eurobond is structured like this and we have public criteria out there then the answer is very simple. If we have a eurobond where Germany guarantees 27 per cent, France 20 per cent and Greece 2 per cent, then the rating of the eurobond would be CC, which is the rating of Greece".
Standard & Poor's In July cut Greece's sovereign credit rating further into junk territory, lowering it to CC from CCC, saying the European Union's proposed debt restructuring would put the country into "selective default".
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