Wednesday 7 December 2016

Eurozone 'cannot last', says Straw

Andrew Woodcock

Published 21/06/2011 | 05:00

The euro is heading for collapse because of the crisis in Greece, and a speedy demise may be better than a "slow death" for the single currency, former British foreign secretary Jack Straw warned yesterday.

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Mr Straw became the most senior UK politician to say that the eurozone "cannot last", as he urged ministers in the House of Commons to prepare Britain for "alternatives" to the European single currency.

His comments came as EU finance ministers refused to give the Greek government a second bailout package of €12bn unless it agrees to implement a set of €28bn austerity measures.

After the meeting, the EU's monetary affairs commissioner Olli Rehn recognised "fatigue" among the bloc's wealthier states, which have been asked to help not only Greece but this country and Portugal, too.

But he urged countries to press on with austerity measures, saying Europe was "about to complete a decisive response to the worst crisis since the Second World War".

Downing Street made clear that Britain had not been asked to contribute toward the latest bailout. But treasury financial secretary Mark Hoban told MPs that the burden of supporting Greece may have to be shared by the IMF, of which the UK is a major shareholder.

Mr Straw told the Commons the UK's potential exposure to Greek debt, including of private banks, totalled £8bn (€9bn).

"What the government should do, instead of sheltering behind weasel words, (is) recognise that this eurozone cannot last," said Mr Straw.

But deputy prime minister Nick Clegg said "predictions of catastrophe" in the eurozone were not in Britain's interests.

Irish Independent

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