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Schäuble suggests temporary eurozone exit for Greece

The German finance minister says it could be possible for Greece to temporarily exit the euro. He...
Newstalk
Newstalk

13.26 4 Jul 2015


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Schäuble suggests temporary eu...

Schäuble suggests temporary eurozone exit for Greece

Newstalk
Newstalk

13.26 4 Jul 2015


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The German finance minister says it could be possible for Greece to temporarily exit the euro. He was speaking ahead of the referendum on Greece's bailout conditions which takes place tomorrow.

In an interview with tabloid Bild, Wolfgang Schäuble suggested that this possibility would depend on the results of Sunday's referendum:

"Greece is a part of the Eurozone. There’s no doubt about that. Whether with the euro or temporarily without, this question can only be answered by the Greeks themselves," he said.

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Schäuble also said that should Greece exit the eurozone, the contagion risk would be low, and that other member states would not abandon Greece:

“We will not leave the people of Greece in the lurch.”

Greece's creditors have been accused of scaremongering by the country's finance minister as Greeks prepare to vote on a possible new bailout deal.

Yanis Varoufakis claimed the International Monetary Fund, European Central Bank and the European Union wanted to "humiliate Greeks" as he argued for a "No" in Sunday's referendum.

Meanwhile thousands of people are attending an Irish protest in solidarity with the Greeks, calling for a "No" vote in the referendum.

Demonstrators in Dublin are marching from the Central Bank to the Dáil in what they call 'a common battle against austerity in both countries'.

Image: Sam Boal/Photocall Ireland

The vote could decide Greece's future as a member of Europe's single currency and comes amid a new warning that a "No" result could hasten their departure from the euro.

The country's arch-critic - Germany's finance minister Wolfgang Schaeuble - said Greece would remain part of the eurozone whatever happened, but could temporarily lose the single currency.

People across Greece are preparing to vote, with many travelling back to their home regions to do so.

But the most recent polls suggested the result was too close to call, with the nation of 11 million people evenly divided.

Prime Minister Alexis Tsipras believes a "No" vote would strengthen his hand in negotiations with creditors to get a less harsh deal for a country ravaged by years of austerity, recession and poverty.

However, "Yes" supporters fear a so-called "Grexit" from the eurozone and a return to Greece's former currency, the drachma, if Mr Tsipras got his way.

Referendum

Critics of the government have also complained the very technical bailout question was unintelligible, while eurozone officials said the "deal" which is referred to expired last Tuesday.

The question is:

"Must the agreement plan submitted by the European Commission, the European Central Bank and the International Monetary Fund to the Eurogroup of 25 June, 2015, and comprised of two parts which make up their joint proposal, be accepted?

"The first document is titled 'reforms for the completion of the current program and beyond' and the second 'Preliminary debt sustainability analysis.'"

Voters are being asked to tick one of two boxes: "not approved/no" and - below it - "approved/yes."

European Commission chief Jean-Claude Juncker warned Greece's negotiating position would be "dramatically weakened" in the event of a "No" - and still difficult even in the event of a "Yes" vote.

The referendum was called as Athens failed to reach a deal with the creditors last weekend on an extension of its bailout programme.

Since then, the country's banks have been closed and capital controls (€60 daily limits on ATM cash withdrawals for customers leading to long queues) have been imposed until July 6.

Mr Varoufakis said whatever the result of Sunday's vote, the banks would reopen and Athens would end up reaching an accord with its creditors.

He said failure to agree a new bailout deal would be too costly for both sides and a trillion euros would be lost if Greece was allowed to crash.

But he also reiterated he would resign if there was a "Yes" vote. His left-wing Syriza government could also collapse.

He said the troika of creditors wanted to "humiliate Greeks" and make them an example of what not to do for other countries, like Spain, where radical left-wing parties are finding increased support.

"What they're doing with Greece has a name - terrorism," he told the Spanish El Mundo newspaper.

"Why did they force us to close the banks? To instill fear in people. And spreading fear is called terrorism," he said, referring to the IMF, ECB and EU.


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