Vienna, 03 November 2011 Fekter warns that a default by Greece could give rise to a domino effect Greek default should be prevented so that credit-default insurances are not triggered – Austrian loans to Greece unaffected by ‘haircut’

Greek default should be prevented so that credit-default insurances are not triggered – Austrian loans to Greece unaffected by ‘haircut’

Austrian Finance Minister Dr. Fekter warns that the Greek crisis could give rise to a domino effect. “The objective is to prevent a default, because otherwise all of the credit-default swaps will be triggered at one fell swoop”, the Finance Minister stated. Fekter continued: “There are no certain indications of how many credit default insurance contracts have been taken out around the world to cover a default by Greece. A case of this kind could result in a scenario like the one following the Lehman insolvency in 2008”, Fekter warned. She stated that the community of states should prevent a “domino effect” of this kind by all means.

“At the meeting of EU finance ministers in Brussels on Monday, we will be discussing the question of how things are going to continue in Greece”, Fekter said. “My hope is that the Greek finance minister, Evangelos Venizelos, will provide greater clarity in respect of the Greek domestic political situation”, Fekter noted.

In conclusion, the Finance Minister stated that “the EUR 1.38 billion in bilateral credits from Austria will not be affected in any way by a ‘haircut’. Those loans will not be included in the haircut.”