Rumour of default might wake ECB up to reality
Published 07/05/2011 | 05:00
Reports that Greece is considering quitting the euro and defaulting on its debts might be just the shock required to persuade the ECB, EU and the German and French governments to adopt a more realistic approach to dealing with Ireland's twin fiscal and banking crises.
Yesterday German news magazine 'Der Spiegel' ran an apparently well-sourced story stating that an emergency meeting of eurozone finance ministers would be held this weekend to discuss the possible withdrawal of Greece from the euro. Although the reports were quickly denied by the Greek prime minister's office, the German finance ministry and EU economic and monetary affairs commissioner Olli Rehn, this is a story that won't be swatted aside easily.
Firstly the 'Der Spiegel' story, which drew on German government sources, was unusually well-informed. It quoted from what it claimed was an internal German finance ministry document detailing the possible consequences of Greece leaving the euro and the virtually inevitable Greek debt default which would follow any such move.