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15 May 2012

Bloomberg: Greek vote escalates crisis as Schäuble raises euro exit


Greece's decision to return to the ballot box in the search for a government unleashed a hazardous new phase in Europe's debt crisis, with German Finance Minister, Wolfgang Schäuble, calling the vote a referendum on whether the country stays in the euro.

“If Greece -- and this is the will of the great majority -- wants to stay in the euro, then they have to accept the conditions”, Schäuble told reporters at a meeting of European finance ministers in Brussels. “Otherwise it isn’t possible. No responsible candidate can hide that from the electorate.”

“What’s at stake isn’t just the next Greek government”, German Foreign Minister, Guido Westerwelle, said. “What’s at stake is the Greek people’s commitment to Europe and the euro.” Policy-makers gave an inkling of the behind-the-scenes planning to cope with a Greek departure, which would send shockwaves through the European banking system and leave lenders to Greece’s government, businesses and households unsure of getting their money back.

The International Monetary Fund has “to be technically prepared for anything”, said IMF Managing Director, Christine Lagarde.

EU treaties declare the euro “irrevocable” and provide no exit procedure. A December 2009 study by the ECB’s legal department deemed an ouster or departure “so challenging, conceptually, legally and practically, that its likelihood is close to zero”.

Full article



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