'Greece out of euro' calls multiply in Germany

Author thumbnail
9 May, 2012 Updated Wed 9 May 2012 17:10 CEST
image alt text

German politicians have called for Greece to leave the eurozone and return to the Drachma, as the country fails to form a government following Sunday’s election in which mainstream parties were punished for EU austerity measures.


It must stick to a March deal agreed with its international backers and enact promised reforms to remain within the eurozone, Finance Minister Wolfgang Schäuble said on Wednesday.

"If Greece wants to remain in the eurozone, there is no better solution than the path it has already taken," Schaeuble said, referring to austerity cuts and reforms in return for a 240-billion-euro debt bailout. "You can't have one without the other," he said.

Others were a few steps ahead. “We should make Greece the offer to leave the eurozone in an orderly fashion, without leaving the European Union,” said Klaus-Peter Willsch, budgetary expert for Chancellor Angela Merkel’s Christian Democratic Union.

He told Wednesday’s business daily Handelsblatt it was not up to the Germans to tell the Greeks how to live, but the election results indicated that the Greeks were not willing to make the effort required to make their country competitive.

“The dogma that no country can leave the eurozone has already caused too much political damage in Europe,” he said.

He was joined by the deputy chairman of the CDU’s parliamentary faction, Michael Meister, who told the paper that although it was not the aim of EU partners to throw Greece out of the common currency, “it is clear that if the new Greek government, contrary to expectations, does not keep to the contracts, it will have to accept the consequences already announced.”

Frank Schäffler, a finance expert from the CDU’s coalition partner the Free Democratic Party, also said he was open to a possible exit of the Greeks from the eurozone. He told the Handelsblatt that although the Greeks must be given time to sort themselves out, “one must be prepared.”

He said dozens of private studies had been carried out into the possibility. “The government should now, at the very latest, draw up a plan B,” he told the paper.

This idea was enthusiastically supported by the head of economics at the Ifo Institute for Economic Research in Munich, Kai Carstensen. “It is absolutely correct to develop a Plan B which would enable the exit of Greece in the most orderly fashion,” he said.

“At the moment that which many have feared is happening – the necessary internal devaluation through wage and price reductions is politically barely tenable,” he added.

Merkel and European Union leaders have already warned Greece that it must stick to euro rescue package agreements, even though it was these that led to the huge protest vote in Greece at the weekend.

Greece is in its fifth year of recession with unemployment at 20 percent – and has committed itself to earmarking in June another €11.5 billion in savings over the next two years.

It was also made clear this week that the next tranche of bailout money from the EU would depend on those agreements being kept.

But before then, a new government has to be formed – by May 17 – or new elections will be triggered. The two mainstream parties, the conservative New Democracy party and left-leaning Pasok, were severely punished at Sunday’s vote, garnering just 32 percent between them, while a raft of anti-austerity parties profited, including the Golden Dawn neo-Nazis.

Currently the radical left under Alexis Tsipras is trying to form a government after New Democracy failed to do so and handed him the task on Tuesday.

The Local/hc



2012/05/09 17:10

Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.

Please log in to leave a comment.

See Also