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Greek exit from eurozone would be 'manageable' says top ECB official

The comments from Joerg Asmussen come at the beginning of another crucial week for the single currency and troubled Greece.

The Olympics are over, time to get back to the eurozone crisis...
The Olympics are over, time to get back to the eurozone crisis...
Image: Eric Gay/AP/Press Association Images

A TOP EUROPEAN Central Bank (ECB) official has said that a Greek exit from the eurozone would be “manageable”  but expensive and result in higher unemployment.

Joerg Asmussen, a German member of the ECB’s Executive Board, was asked about the possibility of Greece being forced out of the eurozone when he said that while his preference was for the country to stay in the single currency it would be manageable if it did not.

His comments come at the beginning of a crucial week for the eurozone and particularly for Greece whose prime minister Antonis Samaras holds talks with his German and French counterparts as well as the head of the eurogroup, Jean-Claude Juncker.

In an interview with the Frankfurter Rundschau, Asmussen said: “First: My preference is clear. Greece should stay in the eurozone. Second: It is in Greece’s hands to achieve that. Third: A Greek exit would be manageable. Fourth: An exit would not be as orderly as some imagine.”

He said that a Greek exit would spark a slump in growth, job losses and would be “very expensive” for Greece, for Europe and for Germany.

Samaras is under pressure at home to provide relief from austerity but there is some disquiet with Greece’s failure so far to adhere to the timetable set out under its bailout agreement particularly in Germany.

He is expected to discuss the possibility of having two more years to achieve the required cuts needed to unlock the €31.5 billion the country needs to stay afloat but Berlin has insisted that the current timetable must adhered to.

Talks

Samaras holds talks with with Juncker, who is also the prime minister of Luxembourg, on Wednesday before a meeting with German Chancellor Angela Merkel in Berlin on Friday and with French President Francois Hollande over the weekend.

The Greek Foreign Minister Dimitris Avramopoulos is in Berlin today for a meeting with his German counterpart Guido Westerwelle to prepare the talks.

While there are a number of crucial meetings this week there will be plenty of focus on the Troika of the EU, ECB and IMF aka the Troika which is expected  to deliver its latest report on the Greek bailout and its economic reforms in September.

Also in September, the governing council of the European Central Bank will hold its next monetary policy meeting where interest rates will be up for discussion.

While also next month the German consititutional court will rule whether or not the EU rescue fund, the Eiropean Stability Mechanism, is legal.

The New York Times says that while the court is not expected to block Germany’s participation in the fund, it could impose conditions on accessing the fund making decision making within the EU “more cumbersome” than it already is.

- with reporting from AFP

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Hugh O'Connell

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