Reuters: Germany Prepares for Grexit

europe-greeceGermany is preparing for the possibility that Greece will depart from the euro zone if leftist SYRIZA wins the elections and comes to a collision with its European partners.

With SYRIZA leading the polls based on promises that it will ask for the write-off of a big chunk of Greece’s debt and refusal to continue the austerity measures required for the bailout program, a Grexit is almost unavoidable, according to a Reuters report.

The Reuters report is based on an article in German tabloid Bild which cites unnamed government sources.

Bild said that German government officials are almost certain that the left-wing party will win and will clash with Greece’s international creditors, something that may force Greece to leave the euro zone, and they are concerned about the possibility of a bank collapse if Greeks run to withdraw their euro deposits in the event of a Grexit.

The European Union banking union would then have to intervene with a bailout worth billions, the report said.

Der Spiegel magazine reported on Saturday that Berlin considers a Greek exit almost unavoidable if SYRIZA wins, but experts believe the euro zone will be able to cope.

Vice Chancellor Sigmar Gabriel said that Germany wants Greece to stay and there are no emergency plans for a Grexit. He said that Greece should respect its commitments made to Europe, regardless of who wins the elections. However, he said the euro zone has become far more stable in recent years and will not be affected greatly if Greece leaves the euro.