mardi 13 septembre 2011

Merkel warns leaders to watch their words on Greek debt

In a tacit reprimand of her vice chancellor's blunt recognition of the possibility of Greek bankruptcy, German Chancellor Angela Merkel on Tuesday said leaders need to tread carefully when speaking publicly about the country's problems.
"The top priority is to avoid an uncontrolled insolvency, because that would not just affect Greece," Merkel told RBB radio. "Everyone should weigh their words very carefully. What we do not need is volatility on the financial markets. The uncertainties are already big enough."
German Economy Minister and Vice Chancellor Philip R?sler on Monday wrote in a newspaper commentary that "an orderly bankruptcy" for Greece could not be ruled out. European markets plummeted in response.
Merkel emphasized that even though it may be politically unpopular, it was also in Germany's interest to support Greece and keep it in the eurozone.
"I have made my position very clear that everything must be done to keep the eurozone together politically, because we would soon have a domino effect," she said.
Bailout a tough sell
Later Tuesday, Merkel was to meet her Finnish counterpart, Jyrki Katainen, for talks on Greece's second bailout package. Finland has demanded cash collateral in exchange for its parliament ratifying Greece's bailout - calls echoed by the Netherlands.
Leaders of the 17 countries that use the euro currency agreed in July to a second bailout for Greece, but must now convince their national parliaments to ratify the agreement before it can be put into action. Belgium's parliament was scheduled to vote on the bailout on Tuesday.
In a flurry of meetings on the eurozone debt crisis on Tuesday, EU President Herman Van Rompuy was meet with French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi, whose country has seen borrowing rates skyrocket on worries about its own mountain of debt.
Greek Finance Minister Evangelos Venizelos was also scheduled to speak with his German counterpart, Wolfgang Sch?uble, after having a lengthy phone conversation on Monday.
In a rare public expression of criticism aimed at his European allies, US President Barack Obama on Monday said Europe needed a "more effective set of coordinated policies" to deal with the continent's sovereign debt crisis.

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