From the Financial Times: Merkel prepared to consider Greek losses
“If Greece one day handles its revenues again without taking on new debt, then we must take a look at the situation and assess it,” the [Chancellor Angela Merkel] told Germany’s Bild am Sonntag newspaper … even Wolfgang Schäuble, Germany’s finance minister, last week hinted [a haircut on official debt] could come eventually.
excerpt with permission
Eventually some of the official debt will have to be forgiven. This will not happen until after the German election next September, and probably not until 2014 at the earliest.
Note: Long term readers probably remember the “Lord of the Dark Matter” who provided excellent insights on the derivative market. We discussed Europe about a week ago, and his view was a “short of full blown restructuring, there is no solution”. Maybe – just maybe – the Germans are starting to realize that there will have to an official restructuring for Greece – and that would be a positive step.
