Bloomberg: Merkel says uncontrolled Greek insolvency must be avoided

13 September 2011

German Chancellor Angela Merkel said she won't let Greece go into “uncontrolled insolvency” because of the risk of contagion for other euro area countries.

“The top priority is to avoid an uncontrolled insolvency, because that wouldn’t just hit Greece, and the danger that it hits everyone, or at least a number of other countries, is very big”, Merkel said in a German radio interview. “I have made my position very clear: that everything must be done to keep the euro area together politically, because we would very quickly face a domino effect.”

Merkel’s comments deepen the rift within her three-party coalition over aiding Greece ahead of a September 29 parliamentary vote on overhauling the European rescue fund for indebted euro area states. Greece is making an effort to meet debt-reduction targets in its bid to win approval for its next bailout payment from the European Commission, the European Central Bank and International Monetary Fund, Merkel said.

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