Berlin insists it expects Greece to remain in eurozone
Germany has insisted that it expects Greece to stay in the eurozone, despite a news report claiming Berlin was ready to see Athens quit the common currency if the populist Syriza party wins this month’s snap election and reneges on the country’s reform programme.
Der Spiegel magazine reported on Sunday that Chancellor Angela Merkel was abandoning her previous commitment to keeping Greece in the eurozone at any price, and preparing instead for a possible Greek exit in the event that Syriza — which has called for drastic debt cuts and an end to austerity — confronts EU partners with unacceptable demands.
Ms Merkel and Wolfgang Schäuble, her hardline finance minister, have changed their approach because they think the stability of the whole eurozone is no longer at risk as it was at the height of the crisis in 2012, says the magazine, citing unnamed officials.
The article comes amid a growing media debate in Germany about the wisdom of further assisting Greece in the face of the country’s huge debt burden, the popular opposition to austerity and the likelihood of victory for Syriza, which is leading opinion polls.
However, Ms Merkel’s government said on Sunday that it was working on the assumption that even after a Syriza win, Athens would continue to satisfy the requirements of its international creditors, headed by EU institutions.
Georg Streiter, the deputy government spokesman, said: “Greece has fulfilled its obligations in the past. The federal government is assuming that Greece will continue to meet its obligations.”
The finance ministry said it did not comment on “speculative reports”. It referred to a statement from Mr Schäuble, published shortly after the election was called in Greece, in which he said there was no alternative to Greek efforts to overhaul the economy, which were “bearing fruit”.
“If Greece chooses a different path, it will become difficult,” added Mr Schäuble, saying elections did not change the fact that Athens had to stand by its agreements.
The foreign ministry echoed that line, with Michael Roth, the Europe minister, tweeting: “Greece is a member of the eurozone. And it should remain one.”
But the anti-euro Alternative for Germany (AfD) party was quick to seize on the magazine article to poke a finger at Ms Merkel. Bernd Lucke, the party leader, said: “I welcome this belated insight from Ms Merkel and from Schäuble that a Greek exit from the euro would be bearable.”
Carsten Nickel of Teneo Intelligence, a political analysis company, said reports that Germany was considering the option of a Greek euro exit were “intended to send a strong signal to Athens ahead of the upcoming snap general elections”.
He said that “they should not be misread as a definitive positioning in case of Greek non-compliance” with its debt obligations and reform commitments. “It is far more likely that Berlin will develop its strategy of dealing with a new Greek government on the go, and in a more flexible manner.”
However, people close to the government argue that it is most unlikely that chancellery or finance ministry officials had sought to send Greek voters a signal. In their view, the possible advantages of such a move are far outweighed by the potential risks of inflaming anti-EU and anti-German opinion in Greece by being seen to be intervening in the election.
Nevertheless, there is widespread agreement in government circles on the point that a potential “Grexit” is today less of a threat than three years ago. Not only are debt-laden countries, including Greece, making progress with reforms but the EU has backed the eurozone with new institutions, while many commercial banks have raised fresh capital.