Wolfgang Schaeuble, German Finance Minister: Eurozone Would Survive Greek Exit

Wolfgang Schaeuble, Germany's finance minister, said the Eurozone could cope with a Greek exit.

BERLIN -- German Finance Minister Wolfgang Schaeuble is suggesting the eurozone could deal with an abrupt exit by Greece, even though he says he doesn't want that to happen.

Schaeuble was quoted by the Rheinische Post newspaper Friday saying Greece has to fulfill its financial obligations in order to stay in the 17-nation eurozone, but that Athens could not be forced.

Should Greece leave, Schaeuble says "we have learned a lot in the last two years and built in protective mechanisms."

He adds: "The risk of effects on other countries in the eurozone have been reduced and the eurozone as a whole has become more resistant."

Greece is currently trying to form a new government and risks losing its rescue loan lifeline if it does not pass further austerity measures and reforms.

Comments

[Mike Keohane]

09:57 AM on 05/12/2012

An exit by Greece would hardly be noticed. Everyone would be too absorbed in the bankruptcy of Spain.

[KarmaPatrol]

09:33 AM on 05/12/2012

Northern Europe carries the Euro so, ... meh. Another excuse for our casinos (er... banks) to ask for QE3, QE4, etc... in a roundabout way.

[stephan67]

02:37 AM on 05/12/2012

He's lying . Spain will collapse and the Euro will die.

[edejan]

11:05 PM on 05/11/2012

This is what was done to Greece:

http://sw9red.wordpress.com/2011/11/08/how-goldman-sachs-sacked-greece-greg-palast/

The Greek people should not have to suffer for it.

[edejan]

10:52 PM on 05/11/2012

Greece would probably be much better off with a sovereign currency. The Euro is another huge banking scam.

[rdk70816]

10:16 PM on 05/11/2012

Dump the Greeks. Who needs those lazy and shiftless people? They have some nice buildings, but they are all wrecked.

[stephan67]

02:40 AM on 05/12/2012

Rdk your head looks like a ha_mmer .

[rdk70816]

11:33 AM on 05/12/2012

Sticking up for the entitled Greeks? They think they are entitled to a bailout no matter how badly they behave.

[AlanBannacheck]

02:46 PM on 05/13/2012

And America isn't. We have the highest obesity rate and cases of mental disorders in the world! Judge not, lest thee be judged.

[rdk70816]

03:42 PM on 05/13/2012

As soon as O is swept out of office, the country will begin a great recovery.

[Totto]

06:55 PM on 05/11/2012

They can simply put concrete bumpers across the rail lines at the border. How convenient for the rest of Europe.

[Bernique]

06:27 PM on 05/11/2012

What will he say after Germany is next in line (after Italy, Spain, Portugal, Netherlands, Belgium)?

http://www.independent.co.uk/opinion/commentators/owen-jones-this-austerity-backlash-across-europe-could-transform-britain-7734670.html

[Michael GE]

09:15 PM on 05/11/2012

Ah, but don't we need sort those things out a little bit more detailed?

I might be mistaken but I think you recently stated you are from Belgium, right? (Not that it does matter much regarding my line of argument, but I just assume because of that you are a little bit more deeply confident with all the various political developments going on in Europe than just treating all as some bloc ;) - Like: nowhere, not in Belgium, not in Germany, not in Holland or France there are "super majorities").
I am asking just to reassure that (just like me) we all are on the same page understanding that we have pretty complex economic systems and that a single indicator alone doesn't tell the whole story - but that they are sometimes "abused" in electoral campaigns. And I guess we can easily agree that problems in any of those countries you name - plus Greece - are very different in nature).

[Michael GE]

09:16 PM on 05/11/2012

Now ... long introduction, probably short conclusions:
- What stroke me odd in your link was for example the mentioning of the rise in VAT from 6 to 23 percent. Agreed. That's hard to absorb. On the other hand: Germany's VAT was 19 percent at the start of the crisis ... it's somewhat difficult to say: Oh, we tax our people only 6% but we need your taxpayer money now.
- I think, no matter if it's Germany, Belgium, France, Italy or Greece or ... we all are facing the same question: It's obvious that only a small percentage profited over the last two decades. That domestic political movement is gaining traction. US neo-liberalism is "out of fashion". We are right now experiencing domestically struggles between (centrist) Social Democrats and conservatives about how to reverse that.
Ultimately I think there not only must be (to avoid arbitrage) but there will be a continental European consense about it. For me, one of the primary questions is: How to deal with the UK? They'll be the ones refusing it. It's IMO almost impossible to have them as a full member of the common market and still restore cohesion on the continent. The only direction they seem to know (regarding common law and regulation) is: become more American. Everything else they try to veto and unfortunately, we all went a long path down that road over the previous two decades.

[econ1]

12:03 PM on 05/11/2012

Of course the Eurozone will survive Greece's exit. It would hardly notice it. Now, Spain, Italy and France....that would be harder.

[Micheal Frisbie]

11:56 AM on 05/11/2012

but it won't have to, greece has no place to go.

[hdgoose]

11:03 AM on 05/11/2012

If you talked to those that live in Greece; they can tell you; they NEVER wanted to go on the Euro there. It was against the will of the people. They were very happy with the drachma there. Going to the Euro caused them to have huge inflation there and they lost a lot of their main industry which was tourism. Greece doesnt have any commercial industries except maybe olive oil. Thats about it.

[Erikhuffpost]

01:11 PM on 05/11/2012

As a European( Dutch), I can vouch the sentiment you describe applies practically to ALL Eurozone nations.The only country ever to hold a referendum over it was Denmark, and the Danes simply said "No"

Likewise when the Netherlands and France staged referenda regarding the European Constitution, the majority of people voted against it.

The Euro was rammed down our throats.

[Michael GE]

05:46 PM on 05/11/2012

But Erik, let's be honest: For most of our nations it has worked very well so far. I mean, you have similar sentiments everywhere, yes. But don't you too sometimes question how informed these sentiments are? Aren't the often nostalgic?

For example (it has been pointed out over and over again in Germany nowadays) the Euro had inflation- wise much more stability than the D-Mark ever had. Most people aren't aware that long before the introduction of the Euro there was the ECU, a mechanism to prevent extreme depreciation. So, during pretty much all of my life our currencies were tied together anyways. Which is necessary: We cannot have the common market, the economic liberties, ban tariffs without setting limits like that.

[Michael GE]

05:47 PM on 05/11/2012

*grins* A while ago, a friend of mine, born and grown up to teenager (other than me) in eastern Germany was also ranting against the Euro. I stopped him short asking two questions:
a) What do you think, where would you life now and in which system had we held a referendum in 1990 asking: "Are you for or against a Reunification under the condition that we will abandon the D-Mark/ adopt a common currency?"
b) So, you say a single currency can't work with regions so different as Greece and Germany. Well, please lecture me: Since when exactly is your native German state alone any more productive than Greece? (Info: Brandenburg in the north east). So, are of the opinion we should maybe have reunited but eastern Germany would have retained your own currency and we the D-Mark?

[turkeywrld]

09:52 AM on 05/11/2012

Of course Europe can survive without Greece..about time someone spoke up . it ALL needs to be decentralised . keep the open borders (the best ever thing to come out of the 'eurozone') and can all the beurocracy .. ask the Greek people if they want to pay the debt (that's a no brainer) ..too late to find out who caused the problem and hold them accountable..but that is what SHOULD have happened in the 1st place. Unfortunately those who write the rules always cover themselves to avoid actual accountability for thier actions. the ONLY debtor nation to have got it 'right' was Iceland ..but then..they are small enough to have REAL democracy.. and hence..we hear NOTHING about them .

[Estonia-Firster]

09:43 AM on 05/11/2012

Many scratched their heads when the likes of Greece, Portugal, and Spain were admitted to the Euro zone. The decisions were political - translation - politically correct - translation - STUPID. The inevitable and unsurprising fall-out of those decisions are now coming to fruition.

[JasonMNan]

01:09 PM on 05/11/2012

Huh? Your comparisons between countries are at best risible. Greece did a lot of creative accounting (i.e. lied) for years, whereas Ireland and Spain had a property bubble (their public finances pre-2008 were considerably better than so-called core Europe).Maybe your head-scratching is because you are comparing apples and oranges?

[Erikhuffpost]

03:54 PM on 05/11/2012

Operation Self-Deceit

New Documents Shine Light on Euro Birth Defects

Newly revealed German government documents reveal that many in Helmut Kohl's Chancellery had deep doubts about a European common currency when it was introduced in 1998. First and foremost, experts pointed to Italy as being the euro's weak link. The early shortcomings have yet to be corrected.

In response to a request by SPIEGEL, the German government has, for the first time, released hundreds of pages of documents from 1994 to 1998 on the introduction of the euro and the inclusion of Italy in the euro zone. They include reports from the German embassy in Rome, internal government memos and letters, and hand-written minutes of the chancellor's meetings.

The documents prove what was only assumed until now: Italy should never have been accepted into the common currency zone. The decision to invite Rome to join was based almost exclusively on political considerations at the expense of economic criteria. It also created a precedent for a much bigger mistake two years later, namely Greece's acceptance into the euro zone.

Instead of waiting until the economic requirements for a common currency were met, Kohl wanted to demonstrate that Germany, even after its reunification, remained profoundly European in its orientation. He even referred to the new currency as a "bit of a peace guarantee."

http://tinyurl.com/6nbka7p

[usna73]

09:35 AM on 05/11/2012

Not when they have a long line behind them,,,,, it's over folks.

Germany may well have to cave to inflation to stay in the cat bird's seat.

Heaven forbid the banks take the losses that rightly be attributed to them. This too will end at some future date.