Eurozone 'May Allow' Partial Greek Default

The Eurozone is being overburdened and weakened by the Greek debt amid rate hike news, with another $65 billion reportedly required to keep Greece afloat.

A new Greek rescue plan from Eurozone finance ministers may include a selective debt default in the country, Dutch finance minister Jan Kees de Jager said Tuesday.

The news comes after weeks of debate among eurozone ministers over whether a new bailout package for Greece ought to allow for the possibility of a partial default. Now, ministers say they are open to the idea, AFP reports.

“It’s not excluded anymore, clearly,” De Jager said. “We have managed to break the knot, a very difficult knot of a contradictory statement on the one hand…saying that you want substantial private sector involvement and on the other hand you have at all times to avoid a selective default.”

The new rescue plan allows for heavy involvement from the private sector, something that was not courted in the first bailout package for Greece last year. De Jager said that by allowing for a partial default, the eurozone ministers have “broken the knot,” allowing them to get to work in stabilizing the country.

Several important EU countries like Germany, the Netherlands and Finland have insisted on the involvement of the private sector, even if it means a selective default. The European Central Bank, however, has not changed its opposition to such an event in Greece. De Jager acknowledged this.

“Obviously the ECB has stated in the statement that it remained in its position but the 17 ministers did not exclude that anymore so we have more options, a broader scope to work with,” he said.

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