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Greece stays in the Eurozone, insist Merkel and Sarkozy

The French and German leaders moved to quash fears Greece could be forced out of the single currency over its debt crisis.

Nicolas Sarkozy and Angela Merkel
Nicolas Sarkozy and Angela Merkel
Image: Philippe Wojazer/AP/Press Association Images

FRANCE AND GERMANY have said they are “convinced” Greece will remain in the Eurozone, after a three-way conference call between the countries’ leaders last night.

German chancellor Angela Merkel and French president Nicolas Sarkozy spoke to Greek prime minister George Papandreou as fears mounted that the heavily indebted nation would be forced to default and leave the single currency.

After the call, Sarkozy’s office said in a statement that France and Germany “are convinced that the future of Greece is in the Eurozone”, according to AFP.

Papandreou has vowed to implement wide-ranging austerity measures as a condition of ongoing financial support. Earlier in the day, a French government spokeswoman said Sarkozy was prepared to do “whatever it takes” to rescue Greece.

A spokesman for Merkel told the Wall Street Journal that full adherence to the agreed package of cuts was a “prerequisite” for further bailout payments. However, the payments have been delayed as Finnish authorities demand Greek assets as collateral for the loans.

Meanwhile, EU economics commissioner Olli Rehn has said he “totally disagrees” with those suggesting the best way for Greece would be an orderly exit from the Eurozone. He said such a move would have “dramatic repercussions not only for Greece but for all the Eurozone member countries,” EMG reports.

The interest rate on Greek ten-year bonds has been climbing precipitously and now stands at more than 26 per cent. Ireland’s has fallen from highs of 14 per cent in July to just under nine per cent.

About the author:

Michael Freeman

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