Berlin says little risk of Greek crisis infecting Germany

30 Jun 2015 | Author: | No comments yet »

Greece Can Stay in Euro Even With ‘No’ Vote, Schaeuble Tells Lawmakers.

German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece would stay in the euro for the time being if Greek voters reject austerity in a referendum scheduled this week, according to three people present.The deadline for Greece’s bailout expires on Tuesday at the end of the business day and it will owe €1.5bn to the International Monetary Fund (IMF). Schaeuble also said the European Central Bank would do what’s needed to protect the euro if Greeks voted against the bailout terms in the July 5 referendum, according to the people, all of whom participated in the closed-door meeting on Tuesday.

Even if a deal is arranged, the Greek government will not have enough time to pass all the economic reforms necessary to secure another €7.2bn in bailout funds. Here is what we have learnt in the past few days: Capital controls are in effect and so individuals with domestic accounts are allowed to withdraw a maximum of €60 a day and officials say there is no limit on the amount that can be withdrawn by foreign accounts. Germany’s stance suggests that policy makers in Berlin are preparing for Greeks to reject the offer by creditors for continued aid to the euro area’s most-indebted nation. The move has been met with derision however, when it emerged that the talk with the assembled leaders was very brief and the French president, Francois Hollande, apparently popped out to the loo.

Jean-Claude Juncker accused Alexis Tsipras’ government in Athens of “egotism” and appealed to the Greek people to defy the stance of their government when they vote in the referendum on 5 July to say whether they accept the conditions of a bailout. On Monday morning, an economist said that if a gun was put to his head, he would say that there was an 85 per cent probability of Greece being forced to leave the EU in a few weeks’ time.

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