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By Dian L. Chu
According to estimates by The Economist, foreign banks’ exposure to Greece, Portugal and Spain combined comes to €1.2 trillion. European banks have lent most of this. German banks alone account for almost a fifth of the total. (Table 2)
Realizing failure to act risks a financial meltdown, German finance minister Wolfgang Chasuble pleaded with his people and told Der Spiegel that
"We cannot allow the bankruptcy of a euro member state like Greece to turn into a second Lehman Brothers…Greece's debts are all in euros, but it isn't clear who holds how much of those debts. The consequences of a national bankruptcy would be incalculable."
Greek Debt Crisis: Lehman 2.0?
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