From the monetary fortress of the European Central Bank to the pro-European duchy of Luxembourg, policymakers are beginning to air their doubts that Greece can stay in the euro.
Post-election tumult in Athens has put the once-taboo subject of an exit from the 17-country currency union on the agenda, lifting the veil on possible scenario planning afoot behind the scenes.
“If Greece decides not to stay in the eurozone, we cannot force Greece,” German Finance Minister Wolfgang Schaeuble (photo) said at a conference in Brussels on Wednesday.
“They will decide whether to stay in the eurozone or not.”
After 386 billion euros in aid pledges for Greece, Ireland and Portugal, 214 billion euros in ECB bond purchases and another trillion euros in low-interest loans for banks, plus 17 high-level crisis summits, Greece’s political chaos thrust Europe into a perilous new phase.
The world is witnessing an “important moment in European Union history, a moment of crisis,” EU President Herman Van Rompuy said in Brussels.
The euro fell for the eighth day as it dawned on investors that Greek voters’ revolt against austerity, and not the victory of Socialist Francois Hollande in France, was the more significant of the two national elections in the EU on May 6.
“Politically speaking, Greece is already out of the eurozone,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in an e-mailed note.
“The only question is about the timing and disorderliness of its exit.”
Schaeuble said that fiddling with the bailout terms would unleash “catastrophic uncertainty” in financial markets, and the Central Bank’s verdict came from his former deputy, Joerg Asmussen.
“Greece has to be aware that there is no alternative to the agreed consolidation program if it wants to remain a member of the eurozone,” Asmussen, who last year moved from the German Finance Ministry to the ECB board, told Handelsblatt in an interview published on Wednesday.
“If 80 percent of Greeks want to stay in the euro, then I think they have to support parties that are in favor of this policy of staying in the euro,” Luxembourg Foreign Minister Jean Asselborn said at the Brussels conference.
Otherwise “comes the point where Greece unfortunately has squandered the opportunity and that will be very, very painful for the people.”
[Bloomberg] - Ekathimerini.com