BERLIN (Reuters) - The euro zone would be better off without Greece, a conservative member of Germany’s ruling coalition said in an article on Thursday, urging his government to push for an orderly insolvency process for sovereign states.
“Greece would be better served with the drachma and the euro better served without Greece,” said Georg Nuesslein, parliamentary economic policy spokesman for the CSU, the Bavarian sister party to Chancellor Angela Merkel’s Christian Democrats (CDU).
Merkel’s center-right coalition has a small but vocal minority of MPs that want her to push for tougher terms in a second bailout of Greece, which could likely cost 120 billion euros, but they have still toe the party line when needed.
Nuesslein called for an “honest debate” about the economic realities in Greece and criticized a report on its ability to sustain its debt, written by experts from the European Union, European Central Bank and International Monetary Fund, as “not worth the paper it was printed on.”
“Greece has to decide for itself — we won’t kick them out. But the productivity gap is so enormous that Greece would have difficulty getting back up on its feet without devaluing its currency,” he said.
Nuesslein said policymakers should revisit proposals that would allow states to default in an orderly manner.
“We need an insolvency procedure for highly indebted countries. Last year they vowed it would come no matter what, and since then we’ve never heard anything about it ever again,” he said.
Reporting by Christiaan Hetzner; editing by Patrick Graham