Top economist predicts Greek exit in five years

The chief economist at Germany's second largest bank, Commerzbank, said on Monday he thinks Greece will no longer be using the euro in five years time.

Top economist predicts Greek exit in five years
Photo: DPA

Speaking to the Handelsblatt business newspaper, Commerzbank’s Jörg Krämer said that even with a pro-European, coalition government, Greece would not be able to swallow an austerity programme in the medium term.

The conservative New Democracy party narrowly won Greek election on Sunday. It is being urged by European politicians, including German Foreign Minister Guido Westerwelle, to form a coalition government with the socialist Pasok party. Both parties are in favour of Greece accepting a further bailout.

The turn in Greek politics has been somewhat of a relief to politicians and economists as it edges out the far left Syriza party.

But Krämer believes that in the long run, the population of Greece will back neither reforms nor the cost-cutting measures that would come with a further bailout from the eurozone.

“If the eurozone states do not want to lose their international credibility, they will at some point have to cut Greece off,” he told the paper. “Greece will then quickly become bankrupt.”

A Greek exit from the common currency would not mean that the rest of the eurozone will crumble though, said Krämer. He believes that “the euro will survive because the political and economic elite depend on its existence.”

The eurozone could turn into more of a transfer union, he said, as even after a Greek exit, stronger euro states would support weaker ones.

“This would weaken the currency union as a whole because the inevitable increased tax burden would reduce the incentive to work and invest. Inflation will clearly rise, because the European Central Bank has moved too close to the finance ministers, and is releasing too much money into circulation,” he said.

Greece has been forced to seek bailouts twice already, first for €110 billion in 2010 and then for €130 billion this year, plus a €107-billion write-off of private debt.

The Local/AFP/jcw

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Emergency numbers fail in several German states

Callers to the emergency numbers 110 and 112 weren’t able to reach operators Thursday morning in several German states.

The 112 emergency number on an ambulance.
The 112 emergency number on an ambulance. Photo: picture alliance/dpa | Boris Roessler

The emergency number 110 for police and 112 for fire crews failed around the country early Thursday morning, with callers unable to reach emergency operators for urgent assistance between about 4:30 am and 5:40 am local time.

The Office for Civil Protection and Disaster Aid is looking into these outages, which were reported in states including Lower Saxony, Baden-Württemberg, and  Brandenburg, and in major cities like Berlin, Cologne, Hamburg, and Frankfurt. Cologne was further affected by cuts to electricity, drinking water, and regular telephone services. Lower Saxony also saw disruptions to the internal phone networks of police and hospitals.

Emergency services are not reporting any more disturbances and people should be able to once again reach 110 and 112 around the country as normal.

Investigators are looking into the problem, but haven’t yet established a cause or any consequences that may have happened due to the outage. Provider Deutsche Telekom says they have ruled out the possibility of an attack by hackers.