Germany Pushing for 'Hard' Greek Default, Risking Europe-wide 'Snowball'

I honestly don't know how Ambrose Evans-Pritchard can get out of bed in the morning.
If my Weltanschauung matched the tone of his writing I'd hide under the blankets.
The fact that he can get up reminds me of an old joke:

Lost

Three-legged dog

Blind in one eye

Recently castrated

Answers to: Lucky

Here's Ambrose at the Telegraph:

9:13PM BST 10 Oct 2011
German push for Greek default risks EMU-wide 'snowball

Germany is pushing behind the scenes for a "hard" default in Greece with losses of up to 60pc for banks and pension funds, risking a chain-reaction across southern Europe unless credible defences are established first.

Officials in Berlin told The Telegraph it is "more likely than not" that investors will suffer fresh losses on holdings of Greek debt, beyond the 21pc haircut agreed in July.

The exact level will depend on findings by the EU-IMF "Troika" in Athens.

"A lot has happened since July. Greece has fallen back on its commitments, so we have to assume that the 21pc cut is no longer enough," said one source.

Finance minister Wolfgang Schäuble told the Frankfurter Allgemeine that the original haircuts were "probably" too low, saying banks must have "sufficient capital" to cover greater losses if need be. Estimates near 60pc have been circulating in Berlin.

The shift in German policy has ominous echoes of last year when Chancellor Angela Merkel first called for bondholder haircuts, setting off investor flight from Ireland and a fresh spasm in the EU debt crisis.

"This could set off a snowball effect," said Andrew Roberts, credit chief at RBS. "The markets will instantly switch attention to Portugal, where two-year yields are already 17pc"....MORE