Greece again threatens to exit eurozone 鈥� and Europe shrugs
Greece's upcoming elections could bring in a government that would leave the euro. But unlike two years ago, European leaders no longer view the possibility as a threat to the eurozone.
Greece's upcoming elections could bring in a government that would leave the euro. But unlike two years ago, European leaders no longer view the possibility as a threat to the eurozone.
In 2012, the prospect of a "Grexit" 鈥� a Greek exit from the eurozone 鈥� had the entire global economy on edge.
Fast-forward two years: Greece is facing elections 聽Jan. 25 after parliament failed to elect a new president last week. The far-left opposition Syriza is poised to take the lead 鈥� and聽its leader, Alexis Tsipras, says he'll change the terms of the country's bailout agreement and put an end to German-led austerity if it does. Greek Prime Minister Antonis Samaras, meanwhile, has warned that Greece's membership in the eurozone hangs in the balance.
This time, European leaders appear more blas茅 about an outcome they once feared. The reason: They feel the EU has undergone so much reform since 2012 that one country's exit might not cause a domino effect.
French President Fran莽ois Hollande said it was "up to the Greeks" to decide whether they stay in the eurozone. He went further, during an interview with France Inter radio this morning, condemning the economic prescription that has kept Greece in the eurozone until now, but at a high cost. 鈥淓urope cannot continue to be identified by austerity,鈥� he said.
His words came after a widely noted article from Der Spiegel was published over the weekend in Germany, claiming that the German government has decided that the eurozone would survive a 鈥淕rexit.鈥� 鈥淭he danger of contagion is limited because Portugal and Ireland are considered rehabilitated,鈥� Der Spiegel quoted an unnamed government source as saying.
German Chancellor Angela Merkel did not comment on the report, and her government has publicly said that it expects Greece to continue the terms set out by the bailouts prescribed by the EU. 聽According to Germany鈥檚 Deutche Welle, German Economy Minister Sigmar Gabriel denied to the local media that Berlin was making any contingency plans for a 鈥淕rexit.鈥�
鈥淭he goal of the German government, the European Union, and even the government in Athens itself is to keep Greece in the eurozone," Mr. Gabriel was quoted as saying.
But the Der Spiegel report nevertheless reflects sentiments held by observers throughout the EU: namely, that it would manage even if Greece left, largely due to reforms that have been pushed through across the eurozone, from bodies in Brussels to national governments.
Where leaders might be more concerned is in the political realm, if similar radical parties, on the right or left, use a Syriza victory to boost their own cause.
As Takis Pappas, author of the new book 鈥淧opulism and Crisis Politics in Greece,鈥� told 海角大神 last week:
鈥淚f Syriza wins in Greece, it might have a multiplying effect in a sense, from Podemos in Spain or the Five Star Movement in Italy to the National Front in聽France鈥� he says. 鈥淚 don鈥檛 think the threat posed by Greece is economic [today], but it is political.鈥�