German chancellor attempts to halt discussion of Greek default

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German Chancellor Angela Merkel sought on Tuesday to quash talk of an imminent Greek default as the United States voiced concern at the euro zone’s inability to stem its debt crisis.

Market confidence in the 17-nation currency area suffered another blow when Italy had to pay the highest yield since it joined the euro in 1999 to sell 5-year bonds. And the chief executive of carmaker Fiat warned that the euro system “could go off the rails” if EU leaders do not get a grip.

Merkel said in radio interview that Europe was doing everything in its power to avoid a Greek default and urged politicians in her own coalition to weigh their words carefully to avoid creating turmoil on financial markets.

“Full story: Merkel warns on Greece, Obama voices U.S. alarm