EU Threatens to Cut Greek Bailout

"Merkozy" united again: at a summit today, German Chancellor Angela Merkel and French President Nicolas Sarkozy threatened to cut off bailout funds for Greece unless the cash-strapped nation is able to restructure its debt. Both leaders explicitly rejected calls to alleviate the losses of private investors who stand to lose billions if Greece defaults and vowed to move ahead with a tax on financial transactions, despite opposition from Britain. Whether Greece can get private bondholders to agree on a settlement remains an open question. Chief among the concerns is whether the investors would be protected by credit-default insurance if a writedown of Greece’s debt takes place.