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29 May 2012

Reuters: Europe treads a thin line on Greece


The views of Greek voters seem to be trending in the direction European leaders would like, whether as a result of quiet outside pressure, or the realisation that a vote for the far-left really could mean an exit from the euro.

For Europe's leaders, therefore, it remains necessary over the next 2.5 weeks quietly to cajole the Greek public towards backing pro-bailout parties without explicitly saying so. The message is: if you want the euro, back the bailout.

"We want Greece to stay in the euro but meet its commitments and that's a decision that's up to the Greeks", German Finance Minister, Wolfgang Schäuble, said.

Van Rompuy echoed that message in a speech on Sunday in Cyprus, as close to Greece as he could get without visiting it. "Greece must remain in the euro area while respecting its commitments. We expect that after the elections, the next Greek government will make that choice", the European Council president told Cypriot parliamentarians. "The stakes are high - for you as neighbours with close links to its financial system, but also for all of us in the eurozone."

Van Rompuy wasn't overstating the stakes - if Greece were to leave the euro, it would default on up to €300 billion of foreign debt, the vast majority owed to eurozone countries. That would have a profound knock-on impact on banks and economies across the region, and Tsipras knows it.

Full article



© Reuters


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