German Economy Minister Sigmar Gabriel told Greece on Wednesday that it needed to stick to its agreements with international lenders and suggested the euro zone could cope if Athens decided to leave the single currency bloc.
Gabriel said the aim was to keep Greece in the euro zone for political, economic and cultural reasons but added that this would require the new anti-bailout government to implement measures agreed with international lenders. He warned that Athens would have to pick up the tab if it did not deliver.
“If Greece wants to deviate from some of these measures, it must bear the cost itself rather than exporting this to other European countries via a haircut or other such ideas,” Gabriel, who is also deputy chancellor and leader of the centre-left Social Democrats (SPD), told a news conference.
Asked about the possibility of a ‘Grexit’, Gabriel said that would be the “wrong solution” but that it was ultimately up to Athens.
He said that unlike two years ago, there was no longer any risk of contagion in the euro zone due to concerns about Greece’s new government.
“All the decisions in recent years about a banking union and structural reforms in countries like Spain, Portugal and Ireland show that we no longer have to worry like we did back then.”
Gabriel said he could not imagine a haircut on Greek debt, and the citizens of other euro zone states had the right to see agreements made in connection with Greece’s bailouts upheld.
“It is clear that we must aim to keep Greece in the euro zone. But it is also clear that we need to be fair to our own population and other euro states,” he said.
Gabriel urged the Greek government to talk with its partners before making decisions connected to its bailout programme such as the sale of a majority stake in the port of Piraeus, which Athens said on Tuesday it would halt.
He said Greece had minimal room for manoeuvre.
“Things that Greece itself won’t do cannot be shunted onto the taxpayers and employers in neighbouring states,” he said.