Greece better off out of euro -German conservative

Sun Oct 2, 2011 4:48am EDT

(Updates with more quotes from interview)

BERLIN Oct 2 (Reuters) - The deputy leader of the Christian Social Union (CSU), one of three parties in Chancellor Angela Merkel's centre-right coalition, said on Sunday Greece may be better off leaving the euro zone if it cannot restore its fiscal health.

Alexander Dobrindt told Deutschlandfunk radio that a Greek exit from the euro would be a last resort measure and that Greece would find it easier to recover outside the currency bloc.

"I believe it is a solution, if one wants to bring Greece back into a economically stable competitive condition, that this would be done outside the euro zone," he said, according to an advance text of the interview to be aired on Sunday.

Merkel, leader of the Christian Democrats (CDU), and Finance Minister Wolfgang Schaeuble have spoken out against Greece leaving the euro zone. Merkel has warned that or a Greek default could trigger a domino effect

The Free Democrats (FDP), the third party in the centre-right coalition, also has spoken out against a Greek exit

But Horst Seehofer, the leader of the arch conservative CSU, has said he could not rule out Greece leaving the euro zone . It is an increasingly popular stance among the German public.

Dobrindt went further than Seehofer in the Deutschlandfunk interview on Sunday, saying he believed that many Greeks themselves would perhaps soon realise their country's fiscal health could be more quickly restored outside the euro zone.

"It's quite possible that it's dawning on Greeks that restructuring their economy outside the euro zone for a limited time period would be easier than inside the euro zone," Dobrindt said. "And that's why we've been saying: it must be possible to leave the euro zone."

He added: "It must be possible to temporarily leave the euro zone to restore the fiscal health and restructure the economy."

(Reporting By Erik Kirschbaum; Editing by Robert Birsel)

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