Recovery's shape key for ratings - Moody's official

BRUSSELS Nov 6 (Reuters) - The shape of economic recovery will help determine ratings of government bonds and the level of public debt is not the main concern for Moody's rating agency, its sovereign rating officer said on Friday.

"The key issue is the shape of the recovery as governments' balance sheets are badly damaged," Pierre Cailleteau told banking and government officials at the annual European Government Bond Summit in Brussels.

He added he believed the euro zone's recovery would be "hook-shaped", meaning slow return to growth.

He said that when assigning ratings, Moody's looked much more at a country's ability to raise a lot of debt fast at a low cost than on the level of public debt in relation to economic output.

"We don't have fixation on the debt-to-GDP ratio, the concept that we have is debt affordability," he said.

Many European countries that enjoy the highest AAA rating have suffered "massive loss of altitude" within that rating, he said, without elaborating.

Moody's has downgraded only Ireland among the euro zone's countries, but some analysts speculate Greece could be next in line.

Cailleteau said that Germany was comfortably within the triple-A zone, but some others, including Spain was "wounded".

"The U.S. and UK are resilient, they are bending but not breaking," he said, referring to their high debt levels.

At the conference, the majority of participants thought any economic recovery would be L-shaped and W-shaped rather than V-shaped or U-shaped, when they took a vote on the issue through a special system.

In another vote, 62 percent of them said inflation was a bigger threat than deflation. The overwhelming majority of those who voted say the European Central Bank would raise its interest rates in last three quarters of 2010.

(Reporting by Marcin Grajewski; Editing by Victoria Main)