Representatives of European governments and banks, continuing talks that have been under way for several weeks, expressed optimism that they could find ways that bond holders could voluntarily contribute to reducing Greece’s debt.
But S. P., responding to a French proposal to have banks give Athens more time to repay loans as they come due, seemed to leave little room for maneuver. The proposal would amount to a default, S.P. said, because creditors would have to wait longer to be repaid and the value of Greek bonds would effectively be reduced.
“Ratings agencies are saying, ‘We don’t think it’s voluntary; it’s just a way to hide a default’ — which it is,” said Daniel Gros, director of the Center for European Policy Studies in Brussels.
European leaders are trapped between domestic political demands for banks to share the cost of a Greek bailout, and the dire consequences of a default. These would include the collapse of Greek banks, probably followed by the collapse of the Greek economy and Greece’s exit from the euro zone.
A crisis in Greece could quickly spread to European banks, particularly in France and Germany, which own government bonds or have lent money to Greek individuals and businesses. Ratings of French banks have already suffered because of their vulnerability to the Greek economy. And once the precedent of a euro zone default had been set, investors would likely abandon the debts of other struggling members, including Portugal and Spain. More worryingly, a tower of credit default swaps — a form of debt insurance typically sold by investment banks — has been built on the debts of those countries, and the cost of paying up in a default would be huge.
As a result, officials predicted, European governments may have little choice but to abandon or modify the voluntary plan and fill the gap with more money from taxpayer coffers.
A senior figure in the Greek finance ministry, who spoke on condition of anonymity because he was not authorized to speak publicly, said on Monday that it was folly to think that the ratings agencies would view a debt exchange as purely voluntary and not representing a selective default.
“Now the official sector will need to find another 30 billion,” this person said, referring to the 30 billion euros ($43.6 billion) that European political leaders hoped to get from the private sector. That sum was never realistic in the first place, he said.
But he predicted that leaders would not turn their backs on Greece. “Europe has too much riding on this,” the official said. “Greece has done 80 percent of what it is supposed to have done. If Europe were to let Greece go that would be the end of euro zone solidarity.”
Europe is seeking to avoid a default at all cost because it could also initiate payment of credit-default swaps, with unpredictable results. There is little public information on which financial institutions have sold credit-default swaps and might have to absorb losses if Greece defaulted, but it is likely that American banks and insurance companies have taken on the largest share.
The shock to the global economy might compare to the collapse of Lehman Brothers in 2008, the European Central Bank has warned.
Mr. Gros said that calls for investors to roll over maturing Greek debt voluntarily could even backfire, by invoking memories of similar stopgap measures that preceded Argentina’s disorderly default in 2001.
Despite the discouraging assessment Monday from Standard Poor’s, European governments continued work on a contingency plan that they predicted would satisfy the ratings agencies and prevent Greece’s problems from provoking a wider crisis.
There was somewhat less urgency to the talks after euro zone finance ministers agreed over the weekend to provide Athens with financing of 8.7 billion euros ($12.7 billion) from the 110 billion euro bailout agreed to last year, to help the Greek government function through the summer. The new aid eliminates the prospect of a near-term default.
But the finance ministers put off the question of how to provide a second bailout, expected to total as much as 90 billion euros, to keep the country operating through 2014, when it is hoped that Greece will be able to return to the credit markets.
Negotiators are trying to put together a plan that would offer private investors good enough terms to encourage them to take part voluntarily while, at the same time, convincing angry voters in nations like Germany and the Netherlands that financial institutions are sacrificing, too.
Jack Ewing reported from Frankfurt and Landon Thomas Jr. from Athens. Reporting was contributed by Stephen Castle in Brussels and David Jolly and Liz Alderman in Paris.
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