BERLIN (MNI) – The German government is backing off its stance of
not allowing a Greek default under any circumstances, German weekly Welt
am Sonntag and German magazine Der Spiegel reported Sunday.
German government experts believe that the situation would be
manageable even if Greece should choose to exit from the Eurozone, Der
Spiegel wrote.
The German Finance Ministry is already exploring the consequences
of a Greek default for the rest of the Eurozone, the magazine reported.
Under a first scenario, Greece would remain in the Eurozone. Under the
the second, the country would abandon the common currency and
reintroduce the drachma. Both scenarios would involve a haircut on Greek
debt of 50%.
In order to contain the impact from a Greek default, the Finance
Ministry envisages the European Financial Stabiliy Fund (EFSF) providing
bridge loans to indebted Eurozone countries such as Italy or Spain as
well as giving financing to banks hit by a restructuring of Greek debt,
Der Spiegel wrote.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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