BERLIN (MNI) – EU Monetary Affairs Commissioner Olli Rehn in a
newspaper interview published Monday warned that a disorderly insolvency
of Greece would have grave consequences for the rest of Europe.
“It would be difficult to contain a contagion,” Rehn told German
daily Die Welt. Still, the Commissioner said he expected that Greece
would not go into default.
Already on Sunday, German Chancellor Angela Merkel told Germany’s
ARD public television that only the European Stability Mechanism (ESM),
planned for mid-2013, will allow an orderly state insolvency.
“I don’t rule out at all that at some point we will have to ask
whether one can do a state insolvency just like with banks,” Merkel
said.
German weekly Der Spiegel reported on Sunday that the German
finance ministry was looking to start the ESM as early as next year.
Finance Minister Wolfgang Schaeuble said at the margins of the
IMF/World Bank meeting in Washington that if the ESM could come into
effect before mid-2013 “we would have nothing against it.”
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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