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How did EU leaders manage to convince the banks to take a big 50% haircut on their Greek debt last night?Basically, by threatening that if they didn’t, the whole of Europe (states and banks) would blow up.
It was the fiercely delivered wish by Merkel, Sarkozy, Juncker, that if a voluntary agreement with the banks was not possible, we wouldn’t resist one second to move toward a scenario of the total insolvency of Greece,” Luxembourg Prime Minister Jean-Claude Juncker said.
That “would have cost states a lot of money and would have ruined the banks.”
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