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German push for Greek default risks EMU-wide ‘snowball’
Posted By admin On October 11, 2011 @ 3:37 am In World News | Comments Disabled
London Telegraph 
October 11, 2011
Germany is pushing behind the scenes for a “hard” default in Greece with losses of up to 60pc for banks and pension funds, risking a chain-reaction across southern Europe unless credible defences are established first.
Officials in Berlin told The Telegraph it is “more likely than not” that investors will suffer fresh losses on holdings of Greek debt, beyond the 21pc haircut agreed in July.
The exact level will depend on findings by the EU-IMF “Troika” in Athens.
“A lot has happened since July. Greece has fallen back on its commitments, so we have to assume that the 21pc cut is no longer enough,” said one source.
Finance minister Wolfgang Schäuble told the Frankfurter Allgemeine that the original haircuts were “probably” too low, saying banks must have “sufficient capital” to cover greater losses if need be. Estimates near 60pc have been circulating in Berlin.
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URL to article: http://www.prisonplanet.com/german-push-for-greek-default-risks-emu-wide-snowball.html
URLs in this post:
 London Telegraph: http://www.telegraph.co.uk/finance/financialcrisis/8819195/German-push-for-Greek-default-risks-EMU-wide-snowball.html
 German minister raises ‘orderly default’ for Greece: http://www.prisonplanet.com/german-minister-raises-%e2%80%98orderly-default%e2%80%99-for-greece.html
 Greek Debt Rollover May Be ‘Default’: S&P: http://www.prisonplanet.com/greek-debt-rollover-may-be-default-sp.html
 8 Reasons Why The Greek Debt Deal May Not Stop A Chaotic Greek Debt Default: http://www.prisonplanet.com/8-reasons-why-the-greek-debt-deal-may-not-stop-a-chaotic-greek-debt-default.html
 Greek bail-out hopes rise after German retreat: http://www.prisonplanet.com/greek-bail-out-hopes-rise-after-german-retreat.html
 Official Greek Response To Internet “Rumors” Of Imminent Greek Default: http://www.prisonplanet.com/official-greek-response-to-internet-rumors-of-imminent-greek-default.html
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