Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Euro zone no longer obliged to rescue Greece, Merkel ally says

Published 31/12/2014, 17:13
© Reuters. Tsipras, opposition leader and head of radical leftist Syriza party, talks to reporters outside the parliament building after the last round of a presidential vote in Athens

BERLIN (Reuters) - Euro zone politicians are not obliged to rescue Greece as the country is no longer of systemic importance to the single currency bloc, a senior member of German Chancellor Angela Merkel's party was quoted as saying.

In an interview with Rheinische Post newspaper published on Wednesday, Michael Fuchs also said Greek politicians could not now "blackmail" their partners in the currency bloc.

"If Alexis Tsipras of the Greek left party Syriza thinks he can cut back the reform efforts and austerity measures, then the troika will have to cut back the credits for Greece," he said.

"The times where we had to rescue Greece are over. There is no potential for political blackmail anymore. Greece is no longer of systemic importance for the euro."

The remarks are the clearest warning yet to Greek voters from a senior German politician that Athens might lose support if it flouts the terms of its 240 billion euro (187 billion pounds) EU/IMF bailout after early elections next year.

Fuchs, deputy parliamentary floor leader of Merkel's Christian Democrats, has frequently expressed frustrations felt by many politicians and the German public about the pace of reform and political hold ups in twice-rescued Greece.

Polls suggest that Syriza will emerge as the strongest party in the Jan. 25 election, although its lead has narrowed. The party wants to cancel austerity and a big chunk of national debt but says it will keep Greece in the euro zone.

The head of Germany's influential Ifo economic research institute, Hans-Werner Sinn, meanwhile called a Greek exit from the euro zone an option.

"Further debt cuts will be needed again and again, unless the country is released from the euro zone and allowed to regain its competitiveness by devaluation," he told German daily Tagesspiegel.

On Monday, German Finance Minister Wolfgang Schaeuble warned Greece against straying from a path of economic reform, saying any new government in Athens would be held to the pledges made by the current government of premier Antonis Samaras.

© Reuters. Tsipras, opposition leader and head of radical leftist Syriza party, talks to reporters outside the parliament building after the last round of a presidential vote in Athens

(This story has been refiled to fix typos)

(Reporting by Michael Nienaber; Editing by Alexandra Hudson and Catherine Evans)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.