October 27, 2011 / 7:45 PM / 7 years ago

Greece euro zone entry was "error" at time: Sarkozy

PARIS (Reuters) - It was a mistake to let Greece join the euro single currency when it did because its economy was not ready to form a monetary union with others in the club, French President Nicolas Sarkozy said Thursday.

“It was a mistake,” Sarkozy said, when asked during a TV interview about having Greece adopt the euro two years after the single currency was created.

“Its economy was not ready,” Sarkozy said.

Sarkozy gave a rare televised interview to explain the euro zone crisis plan agreed in Brussels the previous evening to the French electorate, six months before a presidential election.

He likened Greece’s sovereign debt crisis to the crisis at Lehman Brothers, and said that a failure to come up with a way to help Greece would have thrown the euro zone and world economy into disorder.

“If Greece had gone bankrupt, there would have been a domino effect that would have affected everybody. The entire euro zone risked being taken down,” Sarkozy said.

The deal, thrashed out after days of tense talks between Sarkozy, German Chancellor Angela Merkel, other euro zone leaders and private financial institutions, halved Greece’s private-sector debt to 100 billion euros after bondholders agreed a 50 percent haircut.

Reporting By Catherine Bremer

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