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Rediff.com  » Business » Sarkozy, Merkel reject calls for orderly insolvency of Greece

Sarkozy, Merkel reject calls for orderly insolvency of Greece

September 15, 2011 11:45 IST

MerkelGerman Chancellor Angela Merkel and French President Nicolas Sarkozy have reaffirmed their support for Greece to remain in the euro zone and rejected calls for an 'orderly insolvency' of the debt-laden nation.

The leaders, who held a telephone conference with Greek Prime Minister Georges Papandreou on last evening, said they were convinced that Greece's future is in the euro zone, a government spokesman said in Berlin.

They also underlined that it is essential 'more than ever before' to fully implement the decisions of the euro zone leaders on July 21 to ensure the stability of the euro zone.

The Euro Zone heads of state and government had agreed at that meeting to expand the group's financial bailout fund from the present level of Euro 440 billion to around Euro 750 billion and to give new powers to the fund to buy sovereign bonds of cash-strapped member nations and to intervene much early to avert a debt crisis.

However, the proposed expansion of the European Financial Stability Facility is facing strong opposition in Germany, where a recent survey showed that more than 65 per cent of the population are against the plan.

Several members of Chancellor Merkel's Christian Democratic Union and its coalition partners have threatened to deny the government their support when it comes up for voting in Parliament at the end of this month.

Image: German Chancellor Angela Merkel

K Mammen Mathew in Berlin
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