Greek default would destroy faith in Europe: Merkel

BERLIN Sun Sep 25, 2011 3:46pm EDT

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BERLIN (Reuters) - Allowing Greece to default on its debt now would destroy investor confidence in the euro zone and might spark contagion like that experienced after the bankruptcy of Lehman Brothers in 2008, German Chancellor Angela Merkel said on Sunday.

"We need to take steps we can control," Merkel said, drawing a parallel between the Greek situation and that of Lehman, whose bankruptcy helped trigger the global financial crisis.

"What we can't do is destroy the confidence of all investors mid-course and get a situation where they say that if we've done it for Greece, we will also do it for Spain, for Belgium, or any other country. Then not a single person would put their money in Europe anymore."

In a one-hour interview on the euro zone crisis with the popular German talk show host Guenther Jauch, Merkel said she relied on the view of the International Monetary Fund (IMF) when assessing how to handle Greece.

As long as the IMF was convinced Greece's debt was sustainable, then she supported that position, she said.

Merkel also made clear that she did not view a parliamentary vote in Germany on Thursday on the euro zone's rescue mechanism as "make-or-brake" for her government.

Because opposition parties support giving new powers to the so-called European Financial Stability Facility (EFSF), passage is not in question.

But some German politicians have suggested that if Merkel fails to win a majority with the conservative parties in her coalition -- known in Germany as a "chancellor majority" -- she should dissolve parliament and call new elections.

"We are talking about a law here, a completely normal law. The government needs a majority. The chancellor majority is what you need when you are voted in as chancellor, or in other special personnel cases," she said. "I want my own majority and I will fight for this."

She also said she was "appalled" at a lack of progress from the Group of 20 countries in forging a consensus on regulating banks and dealing with the "too big to fail" problem.

(Reporting by Noah Barkin)

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Comments (23)
9009 wrote:
Am I the only one who thinks that Merkel looks too much like Angela Lansbury to be taken seriously?

Sep 25, 2011 6:05pm EDT  --  Report as abuse
SpeaktheTruth wrote:
So let’s bail them out with more fake money. Hey, that has worked great all over the rest of the world so far, now hasn’t it?

You see, these Governments and Countries are nothing but one gigantic Ponzi scheme and if they do not keep the chirade up, the whole Global economy will fail.

While people work hard, pay their taxes, and struggle to get by, these jokers just keep making scam after scam to keep their house of cards from collapsing.

You know all those “TERROR” drills you are seeing all over the World.

Wake up, they are not preparing for a terror attack, they are preparing to crack down on YOU when you realize that they have bankrupted the whole bloody world.

The only terror attack that is imminent is a false flag attack that is surely going to usher in a 1 world Government or martial law.

Stock up on food, water, and non-perishables. Right this second, there are plans and drills being conducted that are geared at no one other than you and your family.

Sep 25, 2011 7:00pm EDT  --  Report as abuse
When was there ever faith in Europe. These freakin idiots need to get over their delusions of the benefits of socialism. No matter how it’s packaged, in the end everyone loses. The world would have been better off six years ago if all governments got out of the way and let irresponsible institutions, programs, and governments FAIL!!! The sponges would have gotten off their collective A S S and adjusted to their REAL WORTH.

Sep 25, 2011 7:54pm EDT  --  Report as abuse
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