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Exit by Athens government seems inevitable

Greece exit from eurozone ‘manageable’ say Germans

Greece riotsThe prospect of Greece pulling out of the eurozone has increased after the German government indicated that the other nations in the bloc would not suffer from “contagion”.

German Chancellor Angela Merkel and finance minister Wolfgang Schaeuble believe the single currency trading area has implemented enough reforms since the Greek crisis in 2012 – which led to civil disturbances – to make its exit manageable.

A government source in Berlin was quoted in Der Spiegel, the German news magazine, saying:  “The danger of contagion is limited because Portugal and Ireland are considered rehabilitated.”

The European Stability Mechanism, the eurozone’s bailout fund, is now considered an effective rescue measure and major banks would be protected by the banking union.

It is understood that a Greek exit from the eurozone would be compatible with it remaining in the European Union. But the other nations regard this outcome as unavoidable if the Syriza party comes to power at the General Election called for 25 January after the Athens parliament failed to elect a president.

Prime Minister Antonis Samaras’ conservative New Democracy party, which imposed unpopular budget cuts under Greece’s bailout deal, is facing an uphill battle against Alexis Tsipras’ more popular Syriza, who want to cancel austerity measures and some of the Greek debt.

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