With rumors swirling around Europe, many people are wondering if Greece will be filing bankruptcy. It’s no joke, they are broke. German Chancellor Angela Merkel and French President Nicolas Sarkozy are currently discussing the country’s future in regards to the euro and other risks at a summit on Sunday.
Mr. Sarkozy believes that they can save Greece from bankruptcy, while strengthening aid mechanisms to help other troubled European countries. If Greece fails, the default would wipe out many European banks and send these countries into a recession. Many experts believe that if Greece left the euro zone it would deter other investors from coming to Europe. They feel that the same results could happen by letting Greece fall to bankruptcy.
The leaders of France and Germany are trying to find common ground for a plan to recapitalize all their banks. Because of the Franco-Belgian bank, Moody’s has issued a credit warning against Belgian and Fitch has downgraded Italy’s and Spain’s credit ratings.
The French banks are in grave danger of filing bankruptcy as they have been seen to be over exposed to the Greek, Spanish and Italian debt. All the leaders want to prevent any reduction in Greece’s debt that could trigger a banking crisis across Europe. Germany has been outspoken saying that banks that are under pressure should first look for money from investors before asking for support from the government.