Financial markets surged on Tuesday on hopes of a European rescue plan for Greece, as officials in Berlin admitted it was looking at how to construct a “firewall” to prevent the debt crisis spiraling out of control.
A German government official said that the steep decline in the euro and pressure on bond prices had forced Berlin to ‘take a significant step” in how to deal with the crisis.
Germany is worried that any flight out of Greek assets, especially government bonds, could hit its banks and those in other eurozone countries.
Full story: FT.com / Europe – Berlin looks to build Greek ‘firewall’