Merkel Splits From Sarkozy on Default Risk to Banks: Euro Credit

Angela Merkel and Nicolas Sarkozy are running out of road.

Whether to allow Greece to default and how to manage the fallout, questions they have tried to avoid for more than a year, may finally require answers as European officials turn to fortifying banks and consider ways of easing Greece’s debt load. It costs $6 million plus $100,000 a year to insure $10 million of Greek securities for five years, with credit-insurance prices pointing to a 91 percent chance of default.