Germany Should Ready for Greek Default, Feld Tells Handelsblatt
By Alan Crawford and Patrick Donahue - Jan 19, 2011 3:23 PM GMT Germany should set funds aside to prepare for a Greek default, Lars Feld, a designated economic adviser to the German government, was cited as saying in an interview with Handelsblatt newspaper.
“I don’t believe that Greece will manage to deal with its debts without a cut,” Feld, nominated by the Cabinet to a five- member panel of economists who advise the government and a professor at the University of Freiburg, was cited as saying. “And then German guarantees will come due.”
Feld’s comments underscore Europe’s effort to solve the debt crisis that began in Greece and now threatens Portugal and Spain. European Union governments aim to assemble a solution by March, German Finance Minister Wolfgang Schaeuble said Jan. 13. Purchases of outstanding Greek debt and lower interest rates on rescue loans as well as aid for Portugal and guarantees against excessive debt are all being considered, four people with direct knowledge of the talks told Bloomberg News last week...