Eurozone membership is “irrevocable”, the European Commission said today (5 December), after media reports about Greece leaving the single currency that triggered strong reactions in Athens. EURACTIV Greece reports.
Der Spiegel reported this weekend that Berlin considers “Grexit” almost unavoidable if the left-wing Syriza opposition party, which steadily leads all opinion polls, wins Greece’s parliamentary elections on 25 January.
Commission spokeswoman Annika Breidthardt, told reporters today that, according to the EU treaty law, “euro membership is irrevocable”.
EURACTIV Greece spoke with Greek politicians, who are deeply divided over Der Spiegel’s report and the possible exit of the debt-ridden country from the eurozone.
New Democracy: Spiegel’s warning is timely
Maria Spyraki, MEP and press official of the ruling centre-right New Democracy, told EURACTIV Greece that the German magazine was just describing a harsh reality.
“More than 75% of the Greek debt is in the hands of European public creditors, this means in the hands of the European taxpayer”, she said, adding that the Greek bond market is a rather shallow market, even after the recent bond issuing last April and July.
She added that there is only one thing every single analyst agrees on. “If Greece becomes a “failed” state, the Greek people will face a very harsh experience”, she noted. Spyraki also highlighted that in case Greece decided to dodge its obligations, stopped servicing its debt, and as a consequence faced liquidity bankruptcy and even left the eurozone, this would have little consequence on the bloc.
“Most analysts agree that there will be no significant consequences for systemic banks,” Spyraki said.
Syriza: The German publication is nonsense
Leading Syriza MEP, Giorgos Katrougkalos, made clear that there is neither legal provision [in the EU treaties] nor any intention of his party to abandon the eurozone.
“These reports serve the evident objective to terrorise the Greek electorate […] any kind of blackmail against Greece would destabilize the eurozone as a whole and therefore it will not be attempted,” he said.
Commission Vice-President Jyrki Katainen told EURACTIV Greece last month in Strasbourg that the EU executive “will respect democracy and is ready to cooperate with any government in Greece”, after the strong reactions triggered by Juncker’s interference in Greece’s presidential election process.
Miltiadis Kyrkos, MEP of the newly established socialist party Potami (Socialists & Democrats), told EURACTIV Greece:
“As we all understand, the Greek elections will probably bring another team around the negotiation table on behalf of Athens, without of course prejudging its composition as even New Democracy talks about renegotiating the terms. That is why I think Der Spiegel’s report is an argument that supports one side, and this side argues that Greeks should not ask more. We should not overestimate it. German Social Democrats have already reacted. “Greece should remain in the eurozone and CDU probably made a serious mistake.”
French President François Hollande said in a radio interview today (5 January) that Southern countries including Spain and Greece had paid a heavy price to stay in the euro and it was "up to the Greeks" to decide whether to now remain a part of the single currency.
"As for Greece remaining in the euro zone, Greece alone can decide," Hollande said. "At this time we should not hypothesize about whether, according to the Greek vote, they would not or would still be a member of the euro zone. The Greeks are free to determine their own destiny."
In the European Parliament, the leader of the liberal political group Guy Verhofstadt (Alliance of Liberals and Democrats for Europe) took a firm stance against the idea that Greece could leave the eurozone:
"The idea that Greece would leave the eurozone is nonsense for three reasons. Firstly, polls show that 74% of Greeks do not want to leave the eurozone. Secondly, the Treaties do not allow Greece to leave the eurozone while staying a member of the EU. And thirdly, it would cost the European taxpayers billions of euros if Greece were to reintroduce the Drachma. Reports show that for Germany alone it would already cost €80 billion […] We should not allow ourselves to create a self-fulfilling prophecy. Instead of talking about a possible Grexit, we should focus on solving the investment problem Greece and other countries are facing.”
The Greens were also strongly opposed to any "meddling" in the Greek elections. "European governments and the EU institutions must respect the democratic process in Greece," said Philippe Lamberts, co-president of the Greens/EFA group. "Instead of meddling and threatening, EU leaders and the European Commission should commit to fully respect the outcome of the Greek elections and work with any democratically-elected government to ensure Greece remains a member of the Eurozone. This is in the clear interest of EU and its credibility, as well as Greece. Reckless talk of a Grexit is irresponsible."
Rebecca Harms commented, the Greens/EFA's other co-president added: "While it is clear that reforms remain necessary in Greece, it is equally clear that the one-sided and heavy-handed approach of the adjustment programme has compounded problems and accentuated social hardship. Greece needs a government that can bring about the necessary shift in its economy towards a more sustainable model. European governments and the EU institutions must support Greece, its government and citizens to ensure they can deliver this and finally give Greece a perspective for exiting the economic crisis and making its debt burden sustainable. As has been the case since the beginning of the crisis, it is in the common European interest that Greece remains as a revitalised member of the Eurozone."
Prime Minister Antonis Samaras has brought forward a presidential election by two months to end political uncertainty but faces an early parliamentary election.
Current Finance Minister Gikas Hardouvelis warned that the country faces financial trouble after February if it fails to elect a president, prompting the opposition Syriza party to accuse the government of blackmail to win support.
Greece would face funding problems if a snap election fails to produce a government that can wrap up a pending bailout review due to unlock €7 billion in aid.
Greece needs to repay IMF loans worth about €2.8 billion by the end of March. Its next major funding hurdle comes in July and August when it has to repay over €5 billion in maturing debt.
- 25 January: Parliamentary elections in Greece