Speculation grows over Greek default

INTERNATIONAL alarm over Europe’s debt crisis reached new heights yesterday with US President Barack Obama pressing the bloc’s big countries to show leadership as talks of a Greek default escalated and markets heaped pressure on Italy.

German chancellor Angela Merkel sought to quash talk of an imminent Greek default or exit from the eurozone, but confusion over whether she would issue a joint statement on Greece with French President Sarkozy sent markets up, then down.

Confidence in the 17-nation eurozone was further dented when Italy was forced to pay the highest interest rates since joining the euro in 1999 to sell five-year bonds.