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Schaeuble: Greek Exit Wouldn’t Bring Down Europe

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Wolfgang Schaeuble

The euro area could handle Greece’s exit from the currency union because the risk of contagion has waned, German Finance Minister Wolfgang Schaeuble was quoted as saying in comments to the Rheinische Post newspaper.

“We have learned a lot in the last two years and built in protective mechanisms,” the Dusseldorf-based newspaper quoted Schaeuble as saying in an interview published today, when asked whether the euro area is girded for a Greek exit.

“The risks of contagion for other countries of the euro zone have been reduced and the euro zone as a whole has become more resistant. The notion that we wouldn’t be able to react in a short time to something unforeseen is wrong.”

“We want Greece to stay in the euro zone,” Schaeuble said. “But it has to want this and has to accept its commitments. We can’t force anyone. Europe won’t go under that quickly.”

As Greece struggles to form a post-election government that backs the budget cuts and economic overhaul required under its financial bailout, anyone who tells Greeks there’s an easier, less painful way out is spouting “nonsense,” Schaeuble said, according to the interview.

“We have to tell our Greek friends and partners honestly, fairly and openly that there is no way other than the one we jointly agreed,” Schaeuble told the newspaper. Other European governments and private investors have gone “extraordinarily far” in making concessions, so Greece “has to understand that must fulfill its commitments in return.”
(source: Rheinische Post, Bloomberg)

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  • PL45

     Germany’s banks holds a large amount of “derivatives”.  These amount to at least several times the total GDP of Germany. When triggered could these exploding German derivatives will make what is happening in Greece look like a birthday party.