The European Commission has a “profound sense of foreboding” about Greece and the future of the eurozone, according to an account of a meeting between EU commissioners in Brussels yesterday that was leaked to the BBC.
The account said the commissioners’ concern was in reaction to the “damning failure” of eurozone ministers to agree a new bailout for Greece this week. The document said any default on Greek government debt would leave Greek banks insolvent and “threaten the viability of the ECB [European Central Bank] itself,” which owns 49 billion euros of Greek bonds.
EC President Jose Manuel Barroso was said to have remarked that the markets would “smell blood” at this division between the ECB, which is set against any form of Greek default, and Germany, which wants banks to write off some of their investments in any second bailout.
The European Commission said it would not comment “on anonymous interpretations of meetings.”