Tuesday

31st May 2016

Euro-architect hints at Greek exit

Former European Central Bank (ECB) chief economist and German central banker Otmar Issing has warned that the eurozone may split up - another voice in the chorus talking about a Greek exit from the common currency.

"Everything speaks in favour of saving the euro area. How many countries will be able to be part of it in the long term remains to be seen," Issing wrote in his latest book, entitled: "How we save the euro and strengthen Europe."

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • Talk about a Greek euro-exit has picked up again (Photo: Constantine Gerontis)

Seen as one of the founding fathers of the euro, as he was at the ECB when the euro was launched in 1999, Issing contradicted the current ECB chief who last week insisted that the euro was irreversible.

"We are still a long way off saying 'that's it, now we are sure to make progress'. Substantial reforms in almost all countries are still pending," he wrote.

The role of the ECB as a firefighter in the euro-crisis is also something Issing dismisses: "The less politicians address the root of the problems, the more they look with their expectations and demands to the ECB, which is not made for this. It is a central bank and not an institution to rescue governments threatened by bankruptcy."

Issing's book come just a few days after the head of the Eurogroup of finance ministers, Jean-Claude Juncker, said that the area would "manage" a Greek exit, even if it was not desirable.

German economy minister Philipp Roesler last month said the prospect of Greece leaving had "lost its terror," while regional politicians in Bavaria are demanding for the country to exit by the end of the year.

Meanwhile, Dow Jones newswire reported that the troika of international lenders is delaying its return to Athens to October, rather than September, amid continued struggles by the Greek government to seal a deal on €11.5 billion worth of spending cuts.

The cuts are needed for more money from the €130 billion bailout to flow to the troubled country, upon a troika report saying the Greeks are doing the right things.

In the meantime, the country is rapidly running out of cash. A €3.1 billion bond held mostly by the ECB matures on 20 August, posing an immediate liquidity risk to the twice-bailed-out nation.

Deputy finance minister Christos Staikouras told Skai tv that the spending cuts must be finalised by 14 September when eurozone finance ministers are meeting in Cyprus for an informal gathering.

The cuts were due to be sealed in June, but after two successive elections, Greece has missed all the deadlines for this year.

"We are looking everywhere," conservative Prime Minister Antonis Samaras told reporters in Athens.

The coalition talks are stalling because the two leftist parties in the government oppose any further cuts in public sector jobs.

Finance ministers baulk at tax-avoidance rules

Member states will discuss again in June a proposed directive to outlaw practices used by large companies to avoid paying taxes. Meanwhile, the European Parliament makes progress on its probe of Panama Papers.

News in Brief

  1. Hungary reinforces fence on Serbian border
  2. Juncker to seek renewed backing for TTIP talks
  3. EP president rules out return to German politics
  4. Austrian far-right wants to probe election fraud accusations
  5. Irish PM warns Brexit could bring back border controls
  6. Truckmakers risk record cartel fine
  7. London mayor teams up with British PM on Brexit
  8. Syrian refugees sue Denmark over immigration law

Stakeholders' Highlights

  1. ACCAEducation and Training 2020 - Giving Young People the Workplace Skills They Need
  2. EPSUTrade Unions Back New Undeclared Work Platform
  3. European Healthy Lifestyle AllianceCould targeting children’s fitness boost academic performance?
  4. World VisionDeclares the World Humanitarian Summit a Positive Step in a Longer Journey to Ending Need
  5. EJCPresident Dr. Moshe Kantor on Brexit and the Jewish Question
  6. Swedish EnterprisesNew rules for posted workers - Better Protection or the End of Posting ?
  7. World VisionWhy The EU Needs to Put Children at the Centre of Emergencies - In Their Words
  8. ACCASustainability Reporting in Danger of Losing Its Momentum Says ACCA and CDSB
  9. Dialogue PlatformDiversity as Heritage of Humanity! Join the “Colors of the World“ Show at the EP
  10. Centre Maurits CoppietersNew Responses to the Basque Peace Process? MEP Juaristi on Stateless Challenges Conference
  11. European Healthy Lifestyle AllianceImproving Cardiovascular Health Begins by Closing the Gap in Sex Disparities
  12. IPHRBrussels Talks to Take Stock of Human Rights in Turkmenistan