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German FinMin Schaeuble Still Supports Temporary Grexit

Schaeuble
German Finance Minister Wolfgang Schaeuble admitted that the austerity package approval by the Greek Parliament is an important step that would lead to further negotiations. He stressed that the new bailout deal will be even tougher than before, while he clearly stated that a debt haircut would not be possible if Greece wishes to remain in the euro.
Furthermore, as Schaeuble noted, many economists believe that a debt haircut is the only way to save Greece’s economy. However, that is not possible within the European monetary union, therefore Greece would have to temporarily leave the common currency bloc in order to be granted some debt relief. “This would perhaps be the better way for Greece,” Schaeuble said.
Speaking to Deutschlandfunk radio the German Finance Minister noted that the new round of negotiations would determine whether a new bailout package would be efficient, given Greece’s current situation. “We will start negotiations, we will make every effort, but we must follow the rules because Europe is based on the principles of democracy and the rule of law,” he said.
“No one knows at the moment how it is supposed to work without a debt haircut, and everyone knows that a debt haircut is incompatible with membership in the currency union,” he added.

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