• German officials: Greek bankruptcy still an option

    Philip Rösler, German Economy Minister and vice chancellor and leader of the pro-business Free Democratic Party (FDP), wrote on Monday that Greek bankruptcy must still be an option when discussing the future of Greece’s debt crisis.

    “In order to stabilize the euro, we must not take anything off the table in the short run. That includes as a worst-case scenario an orderly default for Greece, if the necessary instruments for it are available,” wrote Rösler.

     

    The German official’s comments represent a wider change of the attitude in Germany, the largest economy in the eurozone and biggest contributor to Greece’s emergency loan package. They are facing the difficult reality that the debt problems in Greece may be too extensive for the EU to resolve.

    Rösler did not go as far as Horst Seehofer, leader of the conservative Christian Social Union (CSU) and state premier of Bavaria, who said on Sunday that Greece may have to ultimately leave the eurozone return to its previous currency, the drachma.

    He stated that “If, despite all their efforts, the Greeks do not manage [to control their debt], then you can’t rule out this possibility.”

    The executive committee of the CSU, sister party to Chancellor Angela Merkel’s Christian Democratic Union (CDU), is expected to approve a motion Monday that calls for highly-indebted states to leave the currency union.

    European officials have stated repeatedly that no countries will be kicked out of the eurozone and Greek Prime Minister George Papandreou has dismissed such proposals as “not serious.”

    The Greek government introduced new austerity measures Sunday totalling to about 2 billion euros in order to reduce its deficit and placate its debtors.

    Source: DW-World, OEIC staff