Disorderly default would be ‘devastating’ for Greece, Rehn says

Greece must avoid a disorderly debt default or face «devastating consequences,» the EU’s top economic official said on Monday, signaling that euro zone finance ministers are ready to agree a second rescue package for Athens this week.

“A disorderly default in Greece would be a much worse outcome with devastating consequences for Greek society,» EU Economic and Monetary Affairs Commissioner Olli Rehn told a news conference, warning of the knock-on effects for the rest of Europe if Greece was not granted more emergency funding.

Rehn said he expected the government of Prime Minister Lucas Papademos to come up with a further 325 million euros in budget savings to satisfy euro zone finance ministers, scheduled to meet on Wednesday. He also expects Greece’s political leaders to back the deal.

“I am quite confident that the other conditions … will be completed by the next meeting of the Eurogroup, which would then decide on the adoption of the program,» he said. [Reuters]