Official: Greece-less eurozone manageable

Aug. 7, 2012 at 2:14 PM
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BERLIN, Aug. 7 (UPI) -- Just because the eurozone could survive a Greek departure doesn't mean the financially ailing country should leave, one eurozone leader said.

Comments by Jean-Claude Juncker, Luxembourg's prime minister and leader of the eurozone's finance ministers group, were the first remarks about the prospect of Greece's departure from the currency bloc, the British newspaper The Daily Telegraph reported Tuesday.

"From today's perspective, it would be manageable but that does not mean it is desirable," Juncker told a German broadcaster,"because there would be significant risks, especially for ordinary people in Greece."

Juncker said he didn't anticipate any departure move by Greece until at least "the end of the autumn."

His comments were expected to raise prospects that the eurozone is braced for Greece to abandon the euro, the Telegraph said.

Meanwhile, The Social Democratic Party said it backs changes to the German constitution to allow for jointly guaranteed eurozone bonds and a European fiscal union.

The opposition party's announcement, made Monday by party Chairman Sigmar Gabriel, came as the German government confirmed support for a European Central Bank proposal to get involved in bond markets as long as financially troubled countries first apply to the eurozone's rescue funds, the Financial Times reported.

"You will not be able to hold the euro together without a common financial and tax policy," he said.

Such a policy shift would require a significant transfer of budget sovereignty from national parliaments to the European level, and would necessitate a change in the German constitution, the Times said.

A shift also would allow for the introduction of jointly guaranteed eurozone bonds, which has strong support from France, Spain and Italy, but has been resisted by German Chancellor Angela Merkel.

Gabriel said the Social Democrats were backing a program for European reform based on a report it commissioned. The report's contributors argue that Merkel's measures failed to arrest the eurozone crisis by wrongly identifying the main cause as a lack fiscal discipline by individual members, and insisting on national austerity measures.

Gabriel's stance was condemned by government supporters who said it would open a path to a "transfer union" in the eurozone, in which Germany would guarantee the debts of its partners, the Times said.

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