Wednesday 13 November 2019

Merkel moves to ease fears over Greek bankruptcy

German Chancellor Angela Merkel. Photo: Reuters
German Chancellor Angela Merkel. Photo: Reuters reporters

German Chancellor Angela Merkel today appealed for calm today as investor fears of a Greek default continued to grow.

She said the 17-country eurozone had to stick together to avoid an "uncontrolled insolvency.”

"The top priority is to avoid an uncontrolled insolvency, because that would not just affect Greece, and the danger that it hits everyone - or at least several countries - is very big," Merkel told German radio station RBB.

She stressed that the eurozone had to remain intact.

"I have made my position very clear that everything must be done to keep the euro zone together politically.

“Because we would soon have a domino effect," said the chancellor.

Merkel also moved to encourage Greece as it ting its public finances back on track, a prerequisite for more aid.

"Everything I hear from Greece is that the Greek government has hopefully seen the writing on the wall and is now doing some of the things that are required," she said.

But European stocks and French banks continued to fall amid concerns they will be downgraded by rating agency Moody’s and that the debt crisis will hurt interbank lending.

BNP Paribas fell 8.1pc as France’s largest bank denied it is getting a dollar denominated loan.

Societe Generale dropped 3.2pc and Credit Agricole SA (ACA) fell 1.2pc – both have operations in Greece.

The Dow Jones Industrial Average closed yesterday 0.6pc higher, having followed European markets lower at the start of its session.

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