Monday 24 October 2016

Greece crisis: UK stepping up preparations for possible Grexit

Published 17/06/2015 | 11:41

Greek Prime Minister Alexis Tsipras
Greek Prime Minister Alexis Tsipras

The British government is accelerating its preparations for a possible Greek exit from the euro zone, a spokeswoman for Prime Minister David Cameron said on Wednesday, after the Greek central bank warned of the consequences of such a scenario.

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"You can expect that we are continuing to make sure we have the right plans in place and stepping up preparations given where discussions have got to," the spokeswoman told reporters, saying the potential impact on business, banks, the financial sector and tourists was being looked at.

A 'Grexit' or Greek euro zone exit would represent a serious economic risk to Britain, she added, saying it underlined the necessity of having a growing economy and strong public finances.

 A Greek exit from the euro zone would be a lasting blow to Greece and to the European Union's most ambitious political and economic project, a former head of the European Council of EU leaders said on Wednesday.

Herman van Rompuy told a Brussels conference that if Greece were to leave the euro zone, that would also have geopolitical repercussions in the current standoff with Russia over Ukraine, emboldening Moscow to see Europe as weak.

"Everybody has to realise that once you go out, I would not say it is forever ... but it is for a very, very long time," said the former chairman of EU summits who stepped down last October.

"That decision... for leaving is in some way for generations and generations."

The biggest victims of such an outcome would be the Greek people, he said, but the euro area would also be damaged because doubts would arise if another crisis arose in future elsewhere in the currency zone.

Van Rompuy urged all sides to consider the political and geopolitical implications of such a step and not just the economic and financial arguments.

"I hope we will never have to answer the Grexit question," he added.


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