S&P was not in talks with the European Union about the idea because that would present a potential conflict of interest, Moritz Kraemer, managing director, EMEA sovereign ratings, told a panel discussion at the Alpbach Forum economic.

Kraemer said his understanding was that joint euro bonds 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.

"If the euro bond is structured like this and we have public criteria out there then the answer is very simple. If we have a euro bond where Germany guarantees 27 percent, France 20 and Greece 2 percent then the rating of the euro bond would be CC, which is the rating of Greece," he said.

"If it is a joint and not a several guarantee then it would be the weakest-link approach, as we call it," he added.

"Possibly this could be structured in a different way. I don't know because. We are not in talks with the EU. It is not our task to help structuring or advising. We don't do this again to prevent conflict of interest," he said.

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".

S&P was the last of the three major rating agencies to warn of a default after euro zone leaders and banks agreed that the private sector would shoulder part of the burden of the rescue package that offers Greece more cash and easier loan terms to keep it afloat.

Copyright Reuters, 2011