Greek default would destroy faith in Europe-Merkel                                                                                                                    
		
		
	
	                                                                                                                   Reuters - 25/09/2011 21:45:45                                                                                                                                                                                                                                                                                                                                                                                                      BERLIN,  Sept 25 (Reuters) - 
Allowing Greece to default on  its debt now would  destroy investor confidence in the euro zone  and might spark contagion  like that experienced after the  bankruptcy of Lehman Brothers in 2008,  German Chancellor Angela  Merkel said on Sunday.
"We need to take steps we can control," Merkel said, drawing  a parallel  between the Greek situation and that of Lehman, whose  bankruptcy  helped trigger the global financial crisis.
"What we can't do is destroy the confidence of all investors  mid-course  and get a situation where they say that if we've done  it for Greece,  we will also do it for Spain, for Belgium, or any  other country. Then  not a single person would put their money in  Europe anymore."  
In a one-hour interview on the euro zone crisis with the  popular German  talk show host Guenther Jauch, Merkel said she  relied on the view of  the International Monetary Fund (IMF) when  assessing how to handle  Greece.
As long as the IMF was convinced Greece's debt was  sustainable, then she supported that position, she said.
Merkel also made clear that she did not view a parliamentary  vote in  Germany on Thursday on the euro zone's rescue mechanism  as  "make-or-brake" for her government.
Because opposition parties support giving new powers to the  so-called  European Financial Stability Facility (EFSF), passage  is not in  question.
But some German politicians have suggested that if Merkel  fails to win a  majority with the conservative parties in her  coalition -- known in  Germany as a "chancellor majority" -- she  should dissolve parliament  and call new elections.
"We are talking about a law here, a completely normal law. The  government needs a majority. The chancellor majority is what  you need  when you are voted in as chancellor, or in other  special personnel  cases," she said. "I want my own majority and  I will fight for this."  
She also said she was "appalled" at a lack of progress from  the Group  of 20 countries in forging a consensus on regulating  banks and dealing  with the "too big to fail" problem.