May 13, 2012
Eurozone central bankers have talked publicly for the first time of managing a possible Greek exit from Europe’s monetary union as stalemate in Athens talks on a coalition government raises the prospect that Greece will renege on the terms of its international bailout.
The comments by members of the European Central Bank’s governing council indicate that the risk of eurozone fragmentation is being taken increasingly seriously by the region’s policymakers.
They mark a significant shift at the ECB, which has previously argued that European treaties do not allow for an exit and that a break-up would cause incalculable economic damage.
“I guess an amicable divorce – if that was ever needed – would be possible, but I would still regret it,” Luc Coene, central bank governor of Belgium, told the Financial Times.
Patrick Honohan, Irish central bank governor, told a conference in Estonia at the weekend: “Things can happen that are not imagined in the treaties. ... Technically, it [a Greek exit] can be managed. … It is not necessarily fatal, but it is not attractive.”
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