EU's Rehn: euro zone won't allow uncontrolled Greek default
WASHINGTON, Sept 22
WASHINGTON, Sept 22 (Reuters) - European leaders will not allow an uncontrolled default of Greek debt and will not let the country leave the euro zone, the European Union's economic and monetary affairs commissioner said on Thursday.
In a speech to the Peterson Institute for International Economics, Olli Rehn did not explicitly rule out the possibility of Greece defaulting, which many economists now see as inevitable.
"An uncontrolled default or exit of Greece from the euro zone would cause enormous economic and social damage, not only to Greece but to the European Union as a whole, and have serious spillovers to the world economy. We will not let this happen," Rehn said.
He said the 17 countries in the currency bloc needed to work harder on pooling their "economic sovereignty", which might allow proposals such as jointly issued bonds -- which some see as a solution to the crisis -- to work.
"The euro area member states need to go further in pooling economic sovereignty to prevent policies that harm other member states and financial stability," Rehn said.
"Successful strengthening of the Economic and Monetary Union along these lines could also make the consideration of some type of common bonds more realistic."
(Editing by Rex Merrifield)
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