* S&P: Greece, euro zone crisis pales vs long-term challenges
* S&P says Indonesia's credit not dependent on individuals (Adds Indonesia quote, background)
By Kevin Lim and Nopporn Wong-Anan
SINGAPORE, March 3 (Reuters) - Standard & Poor's is less pessimistic on Greece's debt crisis than financial markets and believes that the debt problems of some euro zone countries pale in comparison with long-term challenges of population ageing.
S&P warned last week it may downgrade Greece's government debt by one or two notches within a month, citing risks to economic growth that will make it harder for the government to reduce the fiscal gap.
"The political standing of this government is still very high, if recent polls are to be believed," David Beers, S&P's global head of sovereign ratings, told Reuters on the sidelines of a conference.
"We were fairly clear to the market ... and that would still, if current trends continue, mean we are less pessimistic than the market is on how this story will evolve."
S&P rates Greece BBB+, or two notches above the lowest investment grade, with a negative outlook.
"Our key conclusion is that even if the current fiscal challenges can be overcome, the window is beginning to close on tackling the bigger risks to creditworthiness from population ageing," he told the investment conference.
Of the other troubled European economies, Spain is rated AA+, Ireland is rated AA, while Italy and Portugal are rated A+.
Asked to comment on a probe on Indonesia's top policymakers -- Finance Minister Sri Mulyani Indrawati and Vice President Boediono -- and its impact on the sovereign rating, Beers said "the direction of the credit story is not dependent on two individuals".
"We think the political system is reasonably strong."
Indonesia has been a star performer among emerging markets in the past year, due to strong fundamentals, thriving consumption, but also crucially because of investor hopes that President Susilo Bambang Yudhoyono would press ahead with reforms.
Many analysts say an upgrade of Indonesia's sovereign debt to investment grade is within reach in a couple of years, but prolonged conflict over reform could put that at risk. (Editing by Jan Dahinten)