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Greek euro exit on agenda if bailout deal violated: France

 
 
 
 
 
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French Finance Minister Pierre Moscovici pictured on May 21, 2012at a press conference in Berlin, Germany

French Finance Minister has warned that Greece’s exit from the eurozone will be on the agenda if Greek authorities do not respect the bailout deal after parliamentary elections in mid-June.

“The question would be raised without a doubt…. if the Greeks themselves do not respect their commitments,” Pierre Moscovici said on French Television on Sunday.

“We sincerely hope that Greece remains in the eurozone,” he said. However, Athens should impose required austerity measures if it planned to remain in the euro bloc, he added.

His remarks were in response to a pledge by the Greek radical left leader, Alexis Tsipras, who promised on Friday to cancel the European Union-International Monetary Fund bailout deal if his party garnered enough votes to form a government.

Moscovici said the situation would be “infinitely more complicated,” and admitted that there were “reflections here and there” about the possibility of Athens exiting the single currency area.

Tsipras’s Syriza party came in second on May 6 elections partly due to his pledge to overturn the austerity measures. In the first parliamentary elections, no party could either win a majority of votes or form a coalition government.

Greek voters were outraged at two years of harsh austerity measures, which have been imposed in return for financial assistance. They abandoned the centre-right-centre-left coalition that had governed the country, and voted for more radical parties.

Meanwhile, opinion polls released on Friday showed that Syriza and its rival the conservative New Democracy party could not gain a majority of votes in the repeat elections.

The decisive June 17 votes, could determine whether the country would continue to comply with the austerity measures it agreed to with its European neighbors in exchange for endorsement of the second financial bailout.

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  • Pacific 9

    If Greece exits the EU, Greece will probably collapse. Who in right mind wants to hold Greece’s new currency when everyone is reducing the USD given that both countries share similarity in heavy indebtedness. If Greece’s new currency is worthless so too would almost all its assets except maybe for some strategic land. It is not like Greece have past credentials and fundamentals anywhere near the sight of US. Greece’s domestic consumption unlike that of US probably cannot even help Greece earn enough to service outstanding loans. What’s more, Greeks themselves may even ditch their own currency for EUD or USD. Greece as a gauge can test the water by asking if US is willing to loan it interest free money to refinance its loans?

    • Jman

      Theres no way that Greece would get the USD that’s just absurd!! That would weaken the US economy further as they would absolve all debts and still have to worry about fire fighting Greek financial crisis. They would go back to the Dracma.

      Greece’s sovereign debt maybe equal to that of the States but the difference is the USA is worth much more than Greece and has the ability to generate revenue on a much bigger scale.

      What I can see happening is Greece will leave the Euro, foreign businesses will set up in Greece due to cheap employment and tax breaks for foreign investors. Anything financial will be handled by th EU as they are in soooooo much debt and owe us all sooooo much money that they cant be truste to run their own books.

      It will probably be a 60 year plan for Greece to return to 100% autonomy. Maybe we should all lease Greece like Britain did with Hong Kong as part payment?

  • TRACER

    The best thing what Greece can do is leave EU, it is a money trap which Greece has fallen in. Bailouts are only for the banks and not for the Greek small industry or its population. Bailouts helps only miss management of the banks CEO’s. Since S&P is supported by the banks and insurance companies there for Greeks rating can go up and down according to the wish. There are no parameters for the rating setup. Greece has so much oil and gas which will be later taken away for free because the multinational companies will buy privatize state owned object or property very cheep for example Air Port, Sea Port, and railway, Post and so on. A country in general can not get bankrupt. The local tax payers will suffer for the entire miss happening. Disagree champions should prove other wise. I have worked in and with bad banks right on the source and have good inside knowledge

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