Standard & Poor's on Monday warned that if the French plan to roll over Greek debt is adopted it would probably lead to a "selective default" rating because it would lead to losses for bondholders, however voluntary.

Reuters reported that S&P issued the warning in response to a proposal put forth by French banks to voluntarily renew Greek debt. The banks have major exposure to Greece. Derivatives industry body ISDA had said that before the plan was unveiled that a voluntary rollover would "typically" not trigger credit default swap payments.

S&P disagreed, saying in a statement, "It is our view that each of the two financing options described in the [French banks'] proposal would likely amount to a default under our criteria."

Greece is already having a tough time with austerity measures demanded by the European Union (EU) and International Monetary Fund (IMF) in exchange for financial rescue. Citizens have demonstrated in the streets, with some gatherings turning violent, and unions have called strikes to protest the privatization of Greek-owned utilities and services.

Eurogroup Chairman Jean-Claude Juncker did not help matters when he said in a Sunday magazine interview, "The sovereignty of Greece will be massively limited." He said in Germany's Focus magazine that experts from all over the euro zone would form teams that would go to Athens. "One cannot be allowed to insult the Greeks," he added. "But one has to help them. They have said they are ready to accept expertise from the euro zone."

Spyros Papaspyros, president of the public sector union ADEDY, had harsh words for Juncker's comments. "Mr. Juncker interferes in the internal affairs of a country," he said in the report, "provokes European rules and is an embarrassment for the country whose government tolerates him."