Germany preparing for Greek default

As European finance ministers meet to weigh in on the latest round of loans for Greece, German Finance Minister Wolfgang Schauble is preparing for what could be the inevitable – a Greek default.

According to the Sydney Morning Herald, Schauble believes that cuts brought on by austerity plans are too severe for any government to implement them.

Greece has identified $427 million in cuts called for by the austerity measures recently adopted by its Parliament.

One Euro zone official told the paper that Schauble that even if Greece can make the necessary cuts, it may not be enough to rescue their economy.

”The idea instead is that the Greek government should officially declare  itself bankrupt and begin negotiating an even bigger cut with its creditors. For Schauble, it is more a question of when, not if,” the official said.

 

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