FT: Merkel bids to quash Greece default talk

13 September 2011

Mixed messages from members of Germany’s ruling centre-right coalition have fed recent market turmoil. But the chancellor slapped down her political partners for speculating about Greek insolvency, or even an exit by Athens from the euro.

“Everyone should weigh their words very carefully. What we do not need is alarm in financial markets”, Merkel said. “There is already enough uncertainty.” The German chancellor’s remarks came as US President Barack Obama warned eurozone leaders in an interview with Spanish journalists that they needed to show markets they were taking responsibility for the debt crisis. Ms Merkel and Nicolas Sarkozy, the French president, are holding a conference call on Wednesday with George Papandreou, the Greek prime minister.

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