German minister tells Greece to exit eurozone

http://www.france24.com/en/20120225-german-minister-tells-greece-exit-eurozone

AFP - Germany's interior minister on Saturday came out strongly in favour of debt-stricken Greece leaving the eurozone, arguing that this would would improve its chances of becoming competitive again.

"I do not mean that Greece should be kicked out of" the 17-nation eurozone, said Hans-Peter Friedrich in an interview with news magazine Der Spiegel, "but to create incentives for an exit that they cannot turn down." "Outside European monetary union Greece's chances of regenerating itself and become competitive are definitely bigger than if it remained inside the eurozone," said Friedrich.

Friedrich was speaking ahead of a vote by German lawmakers on Monday on a further 130 billion euros ($175 billion) in loans for Greece. Under a plan hammered out by eurozone finance ministers, Greece would receive up to 130 billion euros in direct loans by 2014 in return for tough new austerity measures and tighter EU-IMF oversight of its economy. A private creditor bond writedown is worth another 107 billion euros. Germany is the biggest contributor to eurozone bailouts. The latest plan for Greece would be financed via the European Financial Stability Facility and does not involve stumping up new funds.

Chancellor Angela Merkel is opposed to Greece leaving the eurozone despite its huge debt burden and expects parliament to give the green light to the latest rescue package. She agreed in January, along with French President Nicolas Sarkozy, to keep Greece inside the eurozone for as long as Athens imposes stringent budget reforms.

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Eurogroup head cannot rule out third Greek bailout

http://www.reuters.com/article/2012/02/24/us-greece-juncker-idUSTRE81N20Q20120224


(Reuters) - The head of the Eurogroup of euro zone finance ministers, Jean-Claude Juncker, said on Friday he could not rule out that Greece may need a third bailout. Euro zone finance ministers struck a deal on Tuesday for a second bailout program for Greece that includes new financing of 130 billion euros and aims to cut Greece's debt to 121 percent of GDP by 2020.

Asked in a television interview if he could be sure Greece would not need a third bailout, Juncker said: "You cannot really exclude that, although we should not have as a starting assumption that a third program will be (needed)."

"We made it clear last Tuesday in Brussels that we are standing ready to support Greece even beyond the time period of this program but I have good reasons to believe that we should now not engage ourselves in a debate on a 'maybe' third program. We should now ... implement the second one," he said, interviewed by David Frost on Al Jazeera. Asked about some experts' view that a Greek default is inevitable, Juncker said: "I don't see that Greece would go for a default."

The euro zone was doing everything to avoid a disorderly default by Greece, which would have had "tragic consequences, not only for Greece, but for the whole euro area as such," he said. On whether Greece would succeed in staying in the euro zone, Juncker said: "You can never exclude a new crisis although I do consider that, being at the epicenter of the global threat, we are slowly regaining safe territory."

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