CHARLES FORELLE
Wall Street Journal
November 15, 2010
Greece’s prime minister lashed out Monday at Germany—its chief euro-zone benefactor—for tough talk on government-debt defaults, making clear the widening strains inside the 16-member euro-zone as the currency bloc wrestles with a teeming sovereign-debt crisis.
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Addressing reporters in Paris, George Papandreou said the Germans’ view—long-held, but recently reiterated—that private bondholders could suffer losses as part of a future bailout was intensifying government-debt woes.
The German position “created a spiral of higher interest rates for countries that seemed to be in a difficult position, such as Ireland or Portugal,” Mr. Papandreou said. He added that the spiral could “break backs” and “force economies toward bankruptcy.”
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The sharp words reflect the severe difficulties the euro zone faces as it tries to shepherd its weaker members through an unstable period in which their access to borrowing from private markets is sharply curtailed.
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