May 19, 2012 / 2:11 PM / 8 years ago

Greek euro exit could be fast if needed: Slovenia

LONDON (Reuters) - The message the euro zone is sending Greece ahead of its June election is there is a chance it could be forced out of the single currency union and that it could happen quickly if necessary, the finance minister of euro member Slovenia said on Saturday.

This month’s inconclusive election in the debt-stricken Mediterranean state has forced a second vote to be scheduled for June 17 and many feel the outcome could dictate the future shape of the bloc.

Janez Sustersic told Reuters the final decision would be up to Greek voters but a euro exit was a real option.

“We are still ready to have Greece in the euro zone, and everyone would be happy because this would be the best possible scenario,” he said.

“If not, there are other options, a real option, which is the option of Greece not being in the euro zone anymore... It’s not impossible to envisage a euro zone without Greece.”

Euro zone policymakers insist they want Greece to stay in, but European Union trade commissioner Karel De Gucht said this week the European Commission and the European Central Bank were working on scenarios in case the country had to leave.

A poll this week showed that voter sentiment in Greece was shifting away from a scenario in which the radical leftist SYRIZA party, which has threatened to tear up Athens’ 130 billion euro bailout, would win, meaning a Greek exit may be avoided.

But Sustersic said if Greece did have to leave, it could happen fast, and staying in would not free Greece from its obligations to get its finances under control.

“It could happen quickly if necessary,” he said. “Of course, the most important message is being in the euro zone and doing the necessary reforms or the measures that were agreed on go hand in hand, so you cannot separate the two issues.”

Under its European Union and International Monetary Fund bailout package, Greece has agreed to slash spending and hike taxes over the next two years to cut its budget deficit so it can eventually stop its mountain of debt from growing.

Greek Centre-left leader Evangelos Venizelos, whose party came in third in the hung election, has suggested Greece could negotiate a longer period to enact the reforms, a move that some euro zone officials have rejected.

Sustersic said such a move would be a mistake.

“It would create a strong moral hazard and it would create a lot of disappointment on the part of other countries that have taken the same medicine, but perhaps in smaller measures,” he said. “So I don’t think that would be a good message. It would be very unwise from the Greek’s side to count on anything like that.”

Editing by James Jukwey

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below