Published 2015-02-17 12:57
Greek Prime Minister Alexis Tsipras speaks to his parliamentary group in Athens on Tuesday.
Following Monday’s breakdown in negotiations between the Greek government and finance ministers of the euro group is now growing fears that the country will be forced to leave the monetary union. The German commercial bank, Commerzbank considers the risk is as high as 50 percent.
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Following Monday’s breakdown in negotiations between the Greek government and finance ministers of the euro group is now growing fears that the country will be forced to leave the monetary union. The German commercial bank, Commerzbank considers the risk is as high as 50 percent.
– All we were offered was loose promises of any kind of flexibility that never was specified. Under such circumstances, the Greek government not to sign it as presented, so we closed the discussion and meeting, said Greece Finance Minister Yanis Varoufakis after he marched out from Monday’s ministerial meeting in Brussels.
Greece’s future in the euro is thus increasingly other than certain.
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The lenders of the eurogroup has given the new left government in Greece until Friday to apply for a six-month extension of the existing scheme. But since it would mean that the previously agreed payment commitments and reforms would largely remain unchanged, the Greeks refused.
– The EU is difficult to take in that there is now a democratically elected government in Greece that challenge and reject the policies that failed in five years. But I am convinced that within 48 hours will succeed agreed wording that makes it possible to move on and find solutions that are good for both Greece and the rest of Europe, said Varoufakis.
The Greek Minister of Finance has written several books on game theory, which led some analysts to speculate that he engaged in a so-called “chicken race” where the stakes for both parties become so high that someone at the last moment must fold down itself. The goal of this would Varoufakis part to be getting more leeway to free himself from the requirements of the EU dictated saving policy.
Varoufakis has denied that he would engage in some sort of game. But Eurogroup chairman Jeroen Dijsselbloem has so far taken a cold-hearted to Greece propositions – and after Monday wrecked meeting he said that now is the Greeks themselves who have the ruling in his hand.
– If Greece asks for an extension of the current program and is ready in the context of the Eurogroup to discuss the details then it is possible that we meet on Friday again, said Dijsselbloem.
As the deadline approaches is growing concern that Greece will be forced to leave the monetary union. The German commercial bank Commerzbank chief economist Joerg Kraemer and economist Christoph Weil writes in a commentary that Friday is indeed a ödesdag for the euro:
“If Greece misses the deadline, it would be very difficult to reach a deal afterwards. Greece would quickly out of money, a payment default would only be a matter of time, “writes Commerzbank economists, who envisions a massive capital flight from Greece and exit from the euro if a solution is not reached by Friday.
Bank analyst mean that the risk of Greece leaving the currency union has increased from 25 to 50 percent, due to Monday’s breakdown in negotiations.
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