by mk

“It is our top priority to avoid an uncontrolled default,” Mrs. Merkel said, “because it would hit not only Greece. The danger would be very high that it would hit many other countries.”

Sounds like default is guaranteed. But can they possibly do it without others being sucked in?

On Tuesday, the Italian treasury sold $5.3 billion worth of a five-year bond at an average yield of 5.6 percent — the highest interest on such bonds Italy has been forced to pay since the formation of the euro union in 1999.

Meanwhile, the yield on 10-year Italian bonds, while down slightly at 5.63 percent on Tuesday, was still uncomfortably close to the 6 percent level that is considered to be unsustainable.

Can Greece go through any type of default and Italian bonds remain at 'sustainable' rates?