Merkel says Greece exit ‘not an issue’

Financial Times
February 8, 2012

Angela Merkel said last night that throwing Greece out of the eurozone was “not an issue” for her, even as Athens missed a third deadline this week to agree new cuts and reforms to get a second eurozone bail-out.

With investors anxious that delays in Greece could spell a messy default – at worst after reintroduction of the drachma – Germany’s chancellor said at a speech in Berlin: “I will not participate in pushing Greece out of the eurozone.”

Ms Merkel and Nicolas Sarkozy, the French president, put pressure on Lucas Papademos, Greece’s prime minister, on Monday when they said Athens swiftly had to agree to new cuts before getting a new €130bn aid package.

Mr Papademos and the three parties supporting his coalition are wrestling with demands by the “troika” of European Commission, International Monetary Fund and European Central Bank in the hope of a near-term sign-off from the eurozone. But Athens has already exasperated Ms Merkel and other European paymasters this week after haggling and brinkmanship saw them miss deadlines, which were meant to bring the green light for new aid tomorrow.

Ms Merkel said the situation in Greece was “very complicated” and was not helped by ossified political structures and an inflexible jobs market, in which many people found job opportunities closed to them.

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