German Chancellor Angela Merkel said that Greece is taking the right steps to get its next bailout payment, warning against allowing a Greek default because of the risk of contagion for other euro-area countries.
Merkel, in a German radio interview to be broadcast today, said that an âuncontrolled insolvencyâ would further roil markets spooked by the prospect of a Greek default. The euro region currently has no system for âorderlyâ insolvency until the permanent rescue fund is established in 2013, she said.
âThe top priority is to avoid an uncontrolled insolvency, because that wouldnât just hit Greece and the danger that it hits everyone, or at least a number of other countries, is very big,â Merkel told Berlin-based broadcaster Inforadio. âI have made my position very clear: that everything must be done to keep the euro area together politically, because we would very quickly face a domino effect.â
Merkelâs comments are a rebuff to calls by members of her ruling coalition to consider allowing Greeceâs insolvency and exit from the currency union as it struggles to satisfy the terms of its aid package. They also belie plans by her government to support German banks in the event that Greece does go into default. Merkel said her goal is to keep the euro area together, according to an e-mailed transcript.
âEverybody should weigh their words very carefully,â she said. âWhat we donât need is unrest in the financial markets. The uncertainties are big enough as it is.â
http://www.bloomberg.com/news/2011-...insolvency-must-be-avoided-radio-reports.html
Merkel, in a German radio interview to be broadcast today, said that an âuncontrolled insolvencyâ would further roil markets spooked by the prospect of a Greek default. The euro region currently has no system for âorderlyâ insolvency until the permanent rescue fund is established in 2013, she said.
âThe top priority is to avoid an uncontrolled insolvency, because that wouldnât just hit Greece and the danger that it hits everyone, or at least a number of other countries, is very big,â Merkel told Berlin-based broadcaster Inforadio. âI have made my position very clear: that everything must be done to keep the euro area together politically, because we would very quickly face a domino effect.â
Merkelâs comments are a rebuff to calls by members of her ruling coalition to consider allowing Greeceâs insolvency and exit from the currency union as it struggles to satisfy the terms of its aid package. They also belie plans by her government to support German banks in the event that Greece does go into default. Merkel said her goal is to keep the euro area together, according to an e-mailed transcript.
âEverybody should weigh their words very carefully,â she said. âWhat we donât need is unrest in the financial markets. The uncertainties are big enough as it is.â
http://www.bloomberg.com/news/2011-...insolvency-must-be-avoided-radio-reports.html
