Saturday

24th Feb 2018

Germany: eurozone would survive Greek exit

  • There are no provisions in the EU treaties for a country leaving the eurozone (Photo: YoungJ523)

German finance minister Wolfgang Schauble has said the eurozone would survive if Greece left it, with the single currency structures more robust than two years ago.

"We want Greece to remain in the eurozone. But it also has to want this and to fulfil its obligations. We cannot force anyone. Europe will not sink that easily," he said in an interview with Friday's edition of the Rheinische Post.

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"The idea that we would not be able to react quickly to something unforeseen is wrong", he said. "We have learned a lot and built defences."

He said that the contagion risk for other euro countries had lessened and that the eurozone as a whole was more resilient.

"European countries and private creditors have made extraordinary moves towards Greece. We did what was possible."

His words come as the likelihood of Greece's departure from the eurozone increased after Sunday's parliamentary elections in which almost two thirds of voters chose parties that said they want to either renegotiate or scrap entirely the conditions attached to EU-IMF bailouts.

Politicians are now on their third attempt to form a government and the country may have to return to urns in June for a second election.

Time is pressing as there is an end-of-June deadline for Greece's parliament to approve a further €11.5 billion in cuts in return for the loan money.

For his part, Schauble said it was "dangerous" to allow Greek citizens to believe that there is a simpler way that avoided "hardships" to get Greece back on a healthy economic path.

Legally the exit issue is a quagmire. There are no provision for countries either leaving the single currency voluntarily or being booted out. Under EU rules, a country would normally have to leave the EU to leave the eurozone.

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Greek Conservatives failed to cobble together a coalition on Monday, with leftist leader Alexis Tsipras set to try and form a government opposing the "barbaric" bail-out, a move that would put into question the country's future in the eurozone.

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The leaders of Estonia, Latvia, and Lithuania say in a joint letter that they are open to talks on creating "new own resources" for a bigger EU budget after the UK leaves the EU.

Opinion

Greek government's steady steps to exit bailout programme

Growth predictions are positive, exports increasing, unemployment dropping and credit-ratings up, says the head of Greece's Syriza delegation to the European Parliament. Now the government in Athens is looking to design its own reform programme.

Analysis

We are not (yet) one people

Talks on the next EU budget will start on Friday. Brussels wants to do much more than before – and needs a lot more money. But arguing about funds won't be enough.

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