Sunday 11 December 2016

EU urged to pull the plug on Greece and let it leave the Euro

Geoff Meade

Published 15/02/2012 | 13:06

EU leaders must plan for the "orderly withdrawal" of Greece from the single currency, the Conservative leader in the European Parliament said today.

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Martin Callanan said the next EU summit, scheduled for March 1, should not seek more cures for the Greek economic crisis but should concentrate on preparing for the country to drop out of the eurozone.

Meanwhile the European Commission insisted that Brussels and the other member states still wanted Greece to stay in the eurozone, despite delays by Athens in agreeing strict conditions for receiving a second EU-IMF bailout in time to avoid looming bankruptcy.

"We want Greece to remain part of the eurozone. We have solidarity on that, but solidarity is a two-way street and Greece has to fulfil the conditions" said a Commission spokesman.

In addition a long-term austerity package of pay, pensions and jobs cuts, Athens has been told to find €325 million of cuts in this year's Greek budget and, deliver a written pledge, signed by all leaders of the Greek coalition government, that the austerity measures will be maintained even if there is a change of Greek government in elections later this year.

Failure to produce such assurances forced the cancellation of emergency talks in Brussels today to consider approval of the 130 billion euro (£110 billion) bailout package without which Greece will not be able to meet its next debt payments on March 20.

Now a routine meeting of EU finance ministers next Monday will be the focus of efforts to finalise the bailout package and the issue is bound to land on the EU summit table on March 1.

Mr Callanan, leader of the European Conservatives and Reformists group of MEPs, which includes the UK Tory faction, said he thought that was the time to pull the plug on Greece.

He told a European Parliament debate: "European politics is no longer anchored in reality. EU summits are becoming a political ritual, divorced from the real world - nobody believes that the latest package will save Greece."

He went on: "Greece is suffering from a 30pc loss of competitiveness against Germany. How do you eliminate such a deficit? Economic reform will, in the long term, be essential. But in the short-term, there is only one solution: a devaluation coupled with a default is the only way to salvage something from the wreckage of the Greek economy and to save a generation or more of young Greeks from a miserable economic inheritance."

Mr Callanan added: "All the energy currently being devoted to drafting and ratifying a new treaty that is irrelevant to the ongoing crisis would be better employed drafting and implementing a plan for the orderly withdrawal of Greece from the euro, including carefully prepared support for the banks that will be most affected.

"That is the sustainable solution - everything else is just a very expensive exercise in kicking the can down the road."

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