Greek euro exit 'manageable' but expensive

Exit would spark a slump in growth

A Greek exit from the eurozone would be "manageable" even if it would be expensive and result in higher unemployment, a top member of the European Central Bank was quoted as saying on Monday.

In an interview with the Frankfurter Rundschau, Joerg Asmussen, a German member of the ECB's Executive Board, was asked about the possibility of debt-wracked Greece being forced out of the eurozone.

"First: My preference is clear. Greece should stay in the eurozone. Second: It is in Greece's hands to achieve that. Third: A Greek exit would be manageable. Fourth: An exit would not be as orderly as some imagine," he said.

Such an exit would spark a slump in growth, job losses and would be "very expensive. In Greece, in Europe and in Germany," said Asmussen.

Asmussen's comments came at the start of a crunch week for Greece as it bids to persuade its European partners to release a further slice of aid to keep its economy on life support and enable it to stay in the 17-nation bloc.

Prime Minister Antonis Samaras holds talks with German Chancellor Angela Merkel in Berlin on Friday and with French President Francois Hollande the day after.

Greek Foreign Minister Dimitris Avramopoulos was in Berlin Monday for a meeting with his German counterpart Guido Westerwelle to prepare the talks.

All eyes are on a key report from Greece's international creditors, known as the Troika, expected in September.

The report will assess Greece's reform progress demanded to unlock some 31.5 billion euros ($38.9 billion) desperately needed to keep the country afloat.

On his foreign tour, Samaras is expected to discuss the possibility of having two more years to achieve the required cuts.

Berlin has until now insisted that Athens must stick to the timeline and reforms agreed in return for its aid package.

But mass circulation Bild reported on Monday that some concessions could be made to Greece within the agreed timeframe.

 

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