European Parliament President Martin Schulz was in Athens on Tuesday for a series of meetings, and he gave a speech in Parliament stressing that "Greece must remain in the euro."
"We must do everything we can to prevent the collapse of the euro," he said, adding that more emphasis must be put on measures to promote growth rather than only on cutbacks.
"A policy based solely on austerity spells economic disaster," he told Greek deputies.
"Budgetary prudence is certainly essential (but) ... there is too much focus on financial penalties and austerity packages," Schulz said, adding that economic growth could be stifled in many European countries.
"How are countries whose economies are at a standstill, which are facing a recession, supposed to pay off their debts? Greece has already paid a high price. It cannot go on paying," he said.
On Monday, the Standard & Poor's ratings agency downgraded Greece's credit rating to "selective default" over a debt writedown deal with private creditors that is an integral part of the second bailout.
The downgrade had been widely expected, as ratings agencies had said the bond swap with private creditors, which seeks to cut euro107 billion ($144 billion) off Greece's debt, would constitute a selective default. Once the swap is carried out next month, the agencies are expected to upgrade Greece.
Late Tuesday, the International Swaps and Derivatives Association said it has accepted for consideration a question relating to a potential credit event with respect to Greece. An ISDA statement said a meeting will be held at 1100GMT on Thursday to determine whether a credit event has occurred.
The decision by the New York-based trade association, which represents hundreds of banks and other companies, will ultimately determine whether the bond swap will trigger payment of insurance taken by investors against a Greek default.
Derek Gatopoulos and AP Television in Athens contributed.
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