Business World

Sunday 4 December 2016

Greece euro exit poses less risk now, two Merkel lawmakers say

Published 13/01/2012 | 05:00

eurozone

  • Go To

A Greek exit from the euro would pose a "significantly smaller" risk of contagion to the rest of the currency area than two years ago before Greece had asked for aid, two lawmakers from German Chancellor Angela Merkel's party said.

Michael Meister, deputy parliamentary caucus leader for Ms Merkel's Christian Democratic Union (CDU), said: "The whole reason why we jumped into action wasn't necessarily out of sympathy with Greece, but rather because we said that there could be a shockwave to the financial system.

"I think the scale of the threat from Greece has diminished," he added yesterday.

Mr Meister's comments are the second time in as many days that a senior CDU lawmaker called into question Greece's future in the eurozone, potentially undermining Ms Merkel as she leads Europe's efforts to keep the 17-member euro area intact.

With the debt crisis now in its third year, Ms Merkel will join CDU lawmakers at a two-day meeting beginning today in Kiel for policy talks focused on the economy.

Greece will have to exit the euro area as it struggles under a mountain of debt, unable to regain its competitiveness without having its own currency to devalue, Michael Fuchs, another deputy CDU floor leader, said yesterday.

For Greece, "the problem is not whether they are capable of paying their loans -- they will not, not at all, never". Greece is still a "special case" and the other 16 euro members will resolve their debt problems and retain the currency, Mr Fuchs said.

Mr Fuchs dismissed the prospect that letting Greece go would trigger speculative attacks against indebted countries such as Spain or Italy. (Bloomberg)

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business