Germany caves on Greek (bank) bailout

More free money from European taxpayers to banks that made bad business investments.

BERLIN – German Chancellor Angela Merkel backed down Friday from insisting that private investors be made to shoulder part of any further bailout for Greece, easing fears of an imminent Greek default but raising the possibility that she could face rebellion at home.

The announcement, made after a two-hour-long meeting in Germany’s capital with French President Nicolas Sarkozy, appeared aimed at allaying investor fears that Europe would not be able to agree on a new financial lifeline for Greece, forcing it to default on its $420 billion debt.


Germany dropped its insistence that private investors wait for Greece’s economy to recover before being repaid. The agreement appeared to end a weeks-long standoff over how generous to be toward private investors, pitting Germany on one side and France, the European Central Bank and much of Europe on the other

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