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Germany not planning for Greek euro exit (Updated)

Germany is not planning for a Greek exit from the euro zone and has not changed its policy towards Athens, Chancellor Angela Merkel’s spokesman said on Wednesday, after the Bild newspaper said Berlin was working on contingency plans for such a move.
Mass-selling Bild said the government was running scenarios for Greece’s Jan. 25 election, including a run on Greek banks, in case of a victory by the left-wing Syriza party, which wants to cancel austerity measures and a part of the country’s debt.
“I don’t know of any such plans and certainly the political leadership in the chancellery is not looking at such scenarios,” spokesman Steffen Seibert told reporters when asked about the Bild report.
A spokesman for the finance ministry echoed his remarks.
Talk of a “Grexit” has spiralled in recent days, but Seibert has stressed that German policy remains the stabilisation of the euro zone without the loss of any of its members.
Der Spiegel magazine reported on Saturday that Berlin considered a Greek exit almost unavoidable if Syriza wins, but believed the euro zone would be able to cope. Syriza is ahead of other parties in Greek opinion polls.
Bild said government experts were concerned about a possible bank collapse if customers storm Greek institutions to secure euro deposits if Athens leaves the single currency bloc.
The European Union banking union would then have to intervene with a bailout worth billions, it said.
The head of Germany’s Ifo institute Hans-Werner Sinn told newspaper Handelsblatt it could cost German taxpayers up to 76 billion euros.
“IRRESPONSIBLE”
As the euro zone’s paymaster, Germany is insisting that Greece sticks to austerity and not backtrack on its bailout commitments, especially as it does not want to open the door for other struggling members to relax their reform efforts.
Die Zeit newspaper suggested that Berlin and Brussels were working on compromise situations with Syriza leader Alexis Tsipras which would allow Greece to stay in the bloc. These would include an extension of the existing loan period in exchange for Tsipras softening his stance.
European Parliament President Martin Schulz, a German Social Democrat, criticised what he branded “irresponsible speculation” about a Greek exit from the euro zone. He said this created an impression that Greeks could not decide their own fate at the ballot box and could end up pushing them towards radical forces.

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