May 9, 2011
Greece insists that there is no scenario under which it will exit the euro zone. But one German economist thinks such a move might be the lesser of two evils. Europe, meanwhile, may have to come to the country's aid with a second bailout package.
The denial from Greek Prime Minister George Papandreou was prompt and vehement. Reports that Athens was considering a withdrawal from the European common currency zone, he said, "are borderline criminal. No such scenario has been discussed even in our unofficial contacts." He then said that Greece should be left alone "to do its job in peace."
Papandreou was referring to a report in Spiegel Online about a meeting held in Luxembourg on Friday night to discuss Greece's ongoing debt crisis. In the immediate wake of the report, several euro-zone governments denied that such a meeting was taking place, but later said that the gathering was one of several informal -- though confidential -- meetings on debt problems within the common currency area.
The story also noted that German government sources told Spiegel Online that Papandreou was looking into the possibility of an exit from the euro zone.
Still, the host of Friday's meeting, Luxembourg Prime Minister Jean-Claude Juncker -- who is also president of the Euro Group and drew criticism for initially disputing that the gathering was taking place -- insisted that "we are not discussing the exit of Greece from the euro area. This is a stupid idea and an avenue we would never take."
Not all economists, however, share that opinion. Hans-Werner Sinn, head of Germany's influential Ifo Business Climate Index, said in an interview with the Sunday edition of the Frankfurter Allgemeine Zeitung that "withdrawal from the euro would be the lesser of two evils."
More
No comments:
Post a Comment