EU, ECB Preparing For Possibility Of Greece Leaving Eurozone

BRUSSELS, May 18 (Reuters) - The European Commission and the European Central Bank are working on an emergency scenario in case Greece has to leave the euro zone, EU trade commissioner Karel De Gucht said in an interview published on Friday.

The comments would appear to be the first time that an EU official has confirmed the existence of contingencies being taken for a possible Greek exit from the currency bloc. Speculation has been rife about such plans, but their existence has not been confirmed.

"A year and a half ago there may have been the danger of a domino effect," he said in an interview with the Belgium's Dutch-language newspaper De Standaard.

"But today there are, both within the European Central Bank and the European Commission, services that are working on emergency scenarios in case Greece doesn't make it."

Comments

[ShelbyGT]

03:16 AM on 05/23/2012

The best move they can make is to kick the Greeks out of the Eurozone. They have voted for politicians that have made foolish promises, so let it be. Letting Greece go, and suffer the consequences, would be the best way to ensure that Italy, Spain, and Portugal understand they they're next and must reform. Greece has a tiny economy and needs to be treated as expendable.

[tnjr]

06:48 PM on 05/21/2012

EU and ECB must have these meetings. The Greeks are electing politicans who say we will default on our debt and not be kicked out of the EU. They should come out and state it, default and your on your own.

[lori279187]

05:01 PM on 05/21/2012

Where they goin'? How can you move a whole country? ( I love messing with headlines.)

[Stopinstigating]

07:52 AM on 05/20/2012

The Federal Reserve along with TBTF investment banks like JP Morgan and Goldman Sachs are up to their necks in European sovereign debt. The effects on our currency, debt and credibility cannot and should not be understated. Yet notice how little we hear about this crisis in the MSM. And what little we do hear is pathetically inadequate.

If you're not reading ZeroHedge, you should:

http://www.zerohedge.com/news/and-now-back-europe-which-more-unfixed-ever

[DBG Enterprises]

01:07 AM on 05/20/2012

Commission, services that are working on emergency scenarios in case Greece doesn't make it."

Followed by Spain...Portugal...Italy...

[RubyMontana]

01:27 PM on 05/21/2012

Perhaps not. Perhaps it's a warning shot. The rest may just get themselves in order without the handout. Now wouldn't that be something new and different?
Greece, if they don't play "ball", may be the sacrifice the EU makes to show there actually are consequences.

[Eagleman]

08:22 PM on 05/19/2012

Let them leave Euro.... All they do is Feta cheese and Gyros

No value to the table

[stephan67]

04:27 AM on 05/20/2012

Eagleman ,you talk like a st_upid man.

[RubyMontana]

01:28 PM on 05/21/2012

It's rather true, LOL!
As a country, they have proven they have little regard for the big picture. I say cut them lose.

[Vapula]

07:58 PM on 05/19/2012

They should also leave the EU. The consequences of them reneging on repayment of money they borrowed and which they have used for their purposes is unacceptable. Someone has to take the loss on these loans and the Greeks are so irresponsible and selfish as to think it perfectly OK that European taxpayers and bank customers be made to pay for them. That is little more than theft pure and simple and for that they should be excluded from the EU.

[tkhatch]

04:59 PM on 05/19/2012

Good riddance !!!!!

[No Dogma Freedom]

09:53 AM on 05/19/2012

So far the GOP and their ilk writing here - can only cry out the people who are lazy did it or are greedy: this is ridicules- GOP line:

The idea that great wealth and democracy can't exist side by side runs right up through the Enlightenment and classical liberalism, including major figures like de Tocqueville, Adam Smith, Jefferson and others. It was more or less assumed.

Aristotle also made the point that if you have, in a perfect democracy, a small number of very rich people and a large number of very poor people, the poor will use their democratic rights to take property away from the rich.

Aristotle regarded that as unjust, and proposed two possible solutions: reducing poverty (which is what he recommended) or reducing democracy.

James Madison, who was no fool, noted the same problem, but unlike Aristotle, he aimed to { reduce democracy) rather than poverty. He believed that the primary goal of government is

"to protect the minority of the opulent against the majority."

As his colleague John Jay was fond of putting it,

"The people who own the country ought to govern it."

This many of the Hudson Institute thinkers here and the tadpole GOP writers running around:

[RubyMontana]

01:30 PM on 05/21/2012

I like John Jay!
In this case, Germany governs Greece!

[gerald4]

05:47 PM on 05/18/2012

Alexandet Tyler said,

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.

A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury.

From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, and then is always followed by a dictatorship."

This is as true of the USA and Greece today as it was over 100 years ago.

[deaddisnee]

06:34 PM on 05/18/2012

So according to you.... a dictator will run Greece after this financial collapse...

[mandalay007]

07:42 PM on 05/18/2012

alas, it might be more efficient-----sorry

[splenetic]

02:52 AM on 05/19/2012

During the Greek military junta (1967-1973), the Greek economy had high rates of economic growth and low inflation and low unemployment.

[mero909]

06:46 PM on 05/18/2012

Well, the US and Greece are neither democracies. They are both Republics with elements of Democracy. Of course, Greece may soon abandon democracy, but that's still to be decided.

[gerald4]

01:26 PM on 05/21/2012

I like your assessment!

[knotsofast]

05:32 PM on 05/18/2012

Lets do a fire sale of California next!

[Chango137]

06:01 PM on 05/18/2012

California is the largest economy is the US, accounting for 13% of GDP, and a net contributor to the Federal Treasury. Only Texas and New York come even a bit close, New York being a net contributor to the Treasury, and Texas being a drain. Maybe California and New York will hold a fire sale of the moocher red states, like Texas.

[knotsofast]

06:04 PM on 05/18/2012

California is a cesspool.

[mero909]

06:47 PM on 05/18/2012

Texas is a drain!? Texas has the 14th largest economy in the world. Texas also produces quite a bit of energy for the states around her. You should get your facts straight.

[VileOverlord]

05:24 PM on 05/18/2012

And we shall mourn the loss with great triviality

[jayes]

05:15 PM on 05/18/2012

anyone know the scope of greek tax evasion? something more meaningful than 'a lot'?

[mero909]

06:59 PM on 05/18/2012

Here's a quality explanation of the Greek problem: http://www.cnn.com/2010/BUSINESS/02/10/greek.debt.qanda/index.html

It doesn't speak about tax evasion, but honestly, years of unrestrained spending looks to be the problem.

[jayes]

07:23 PM on 05/18/2012

thanks. i get the gist of the structural problems. i'm specifically interested in greek tax evasion.

[No Dogma Freedom]

09:56 AM on 05/19/2012

That would be us giving the Banks 16 trillion?

Wall Street 2 trillion?

The wars 4 trillion

The DHS 12 trillion

Nuclear 3 trillion

Tax write: OFFs and Subsidies

Spending for the rich never is on the books for the right wing!

[TucsonDean]

08:43 PM on 05/18/2012

Enormous. The black market is between a quarter and a third of the economy for average people. The industrialist Greek shipping billionnaires and such set up their companies in third world countries and avoid taxes on most of the country's potential income. Private contractors, like doctors and lawyers, simply don't declare most of their income. That means that more than half of the taxable income is never actualy taxed. I happen to be Greek, and can tell you, avoiding the tax man is the national sport.

[tkhatch]

05:02 PM on 05/19/2012

No one wants to pay but everyone wants to benefit.It doesn't work that way.

[No Dogma Freedom]

05:13 PM on 05/18/2012

Ice- lands move:

1) National Banks
2) Wash all debts for all and start from Scratch
3) End ties with the WTO, WB, IMF and Wall Street
4) They Jailed all CE0's who were involved

Greece can go this way too! Let the people organize the Economy, their safety nets and reasons for being not Brussels!

They well be better off in the long run - though as Ice-land its tough at first!

[splenetic]

02:54 AM on 05/19/2012

Iceland went from fairly prosperous to very very rich and back again. What is back again for Greece? And, Iceland has applied to join the EU.

[No Dogma Freedom]

09:44 AM on 05/19/2012

Your ideas of Greece are very diminutive- and lack historical context:
But let us start with your ideas: 
 Iceland Declares Independence from International BanksBy Bill WilsonJune 21, 2011 "Netright" -- – Iceland is free.  And it will remain so, so long as her people wish to remain autonomous of the foreign domination of her would-be masters — in this case, international bankers.On April 9, the fiercely independent people of island-nation defeated a referendum that would have bailed out the UK and the Netherlands who had covered the deposits of British and Dutch investors who had lost funds in Icesave bank in 2008.At the time of the bank’s failure, Iceland refused to cover the losses.  But the UK and Netherlands nonetheless have demanded that Iceland repay them for the “loan” as a condition for admission into the European Union.In response, the Icelandic people have told Europe to go pound sand. The final vote was 103,207 to 69,462, or 58.9 percent to 39.7 percent.   “

[No Dogma Freedom]

11:03 AM on 05/22/2012

Ice- land told the EU to go pound sand! 
Ice- land broke all the Rich man's views: and ended the  racket in their lands
Ice-land, and with people  the wealthy sack the land - not the people!!

[tnjr]

06:46 PM on 05/21/2012

Great move. When I think about all the economic powerhouses in the world, Iceland comes first. What industries are based there? Can you name a car made in Iceland? It's easy for small countries to start over. Greece will be a drain on the world when thedefault, but even a bigger drain on the Greeks as their money is devalued and no country or business will lend them money in fear of another default.

[No Dogma Freedom]

02:07 PM on 05/22/2012

What does the USA have but service - now = service, servitude, slavery at slave labor too! 

[cerebrogasm]

05:10 PM on 05/18/2012

My Right wing friend keeps beating the drum (in my ear) that Greeks can't comprehend what "austerity" means and are constantly living beyond their means, take months off every year for vacations, don't pay their taxes, and expect Germany to keep bailing them out - which it has done - to keep the Eurozone stabilized - which it appears now that the Germans are sick of propping up Greece. I'm not in a position to argue with him - but I do recognize that if Greece drops into economic chaos, the EU will may follow suit, which means America will also be impacted. Einstein stated that the end of a nation will not be by war or other physical calamities - it will always be economic. Are we about to see the cradle of Western civilization fall into the sea?

[beauregard62]

06:54 PM on 05/18/2012

Greece survived for centuries before the Euro.

[splenetic]

02:57 AM on 05/19/2012

as a backwater in the Ottoman Empire.

[cerebrogasm]

03:09 AM on 05/19/2012

Quite true - it's been 10 years since I was in Greece - my take on their collapse out of the EU was that this was not significant enough to bring down the whole system - which will eventually affect America - but I've heard arguments as to why Greece is a major catalyst in such a potential catastrophe - the jury is still out for me - I need more evidence...