December 7, 2011
Former French President Valery Giscard d'Estaing, once a champion of Greece's EU membership, now believes Athens should consider leaving the euro single currency to avoid inflicting the pain of deflation on its people
Giscard is a longtime friend of Greece. He pressed Greece's EU candidacy over German objections, clearing the way for Athens to join what was then called the European Economic Community in 1981. Two decades later Greece joined the euro.
In an interview at his Paris home, Giscard said Greece faced a difficult choice. On Tuesday, the Greek government approved another round of austerity measures as protesters clashed with police outside parliament. Its economy will shrink again next year, a fifth straight year of recession.
"Greece could stay in the euro zone but it is very difficult to achieve economic recovery with a strong currency," the 85-year-old former president said. "Is it better to use a national currency for a period, or have the safety of a strong currency? It is Greece's choice."
Giscard said that had Greece kept the drachma, it would probably have devalued by 40-50 percent by now. He feared the Greek people would not to accept the 40 percent internal deflation that the country's economy needs. "That approach has huge human, social and political costs."
But he had no doubt Greece would remain in the European Union, whether inside or outside the euro. Asked about French President Nicolas Sarkozy's repeated assertion that it would be disastrous if one country were to leave the euro, Giscard said: "He is wrong."
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