May 24, 2012
With Greeks heading to the polls once again in June, finance ministries in euro-zone member states are preparing for the worst. Several media outlets are reporting that contingency plans are being developed to prepare for a Greek exit from the common currency zone.
The new Greek parliamentary elections may still be three weeks away, but the country's euro-zone partners are already preparing for one possible outcome: that Greece will exit the European common currency zone soon after the vote.
Several newspapers, including the Wall Street Journal and the Financial Times Deutschland, are reporting that euro-zone finance ministries are making contingency plans in the event of a Grexit, as the media has dubbed the eventuality. And early on Thursday morning, Euro Group head Jean-Claude Juncker essentially confirmed the supposition.
"I did not ask the member states of the euro area to prepare national contingency plans, but of course we have to consider all kinds of events," he said following the informal European Union summit in Brussels on Thursday night. "But our working assumption is that Greece will stay as a member of the euro area."
The increased focus on a possible Greek exit from the euro comes as the country faces its second set of elections this spring after efforts to produce a governing coalition out of the results from the early May vote failed. With polls indicating that the Syriza party of left-wing politician Alexis Tsipras -- who has demanded that the EU lift austerity demands on his country -- could emerge victorious from the election, there are concerns that Brussels could simply cease making bailout payments. In such a scenario, a departure from the common currency area would become a very real possibility.
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