Top EU officials have decreed Greece should leave the eurozone if unable to stick to the austerity measures imposed by European creditors. The political crisis in Athens is making this scenario not altogether impossible.
The parliamentary elections in Greece on May 6 ended with no political party gaining the majority of seats needed to form a government. Now it appears that their hopes of forming a ruling coalition are falling apart like a card-castle. President of the European Commission José Manuel Barroso told Italy’s SkyTG24 TV channel that since Greece is unable to fulfill its financial obligations towards the EU, it should leave the eurozone.Barroso compared the single currency to a club, the rules of which are binding for members.The President of the European Commission said however highly he respects Greek democracy, he cannot neglect the needs of the other 16 eurozone member states. He stressed that if Athens cannot respect agreements reached, he sees no reason why the EU should not part company with Greece.
Greek politicians seek to stop austerity measures
Barroso’s harsh rhetoric could be regarded as a response to attempts by Greek politicians to reconsider the austerity program imposed on Greece by the EU. On Thursday the head of Greece's second-placed Radical Left Coalition addressed the EU’s top officials, calling on them to re-examine the strict austerity program Greece is going through. The letter was addressed to EU President Herman Van Rompuy, European Commission President Jose Manuel Barroso and European Central Bank chief Mario Draghi. In his letter Alexis Tsipras wrote that the election on May 6 had exposed a strong anti-austerity mood among the Greek population. As a result, the new Greek parliament proved unable to form a working government. All this has stripped Greece's bailout commitments of “political legitimacy.”Tsipras appears to be consistently following the socialist coalition’s anti-bailout agenda that intends to overturn the austerity measures. The leader of the Radical Left Coalition insists that the exhausting demands have proved fruitless. Instead of helping, they are destroying the country’s recession-stricken economy, insists the Greek politician, threatening the top EU officials with a humanitarian crisis in Greece.Alexis Tsipras urged the EU leadership to “re-examine the entire framework of the current strategy” towards his country.
Germany joins Barroso’s warning
The head of Germany’s Central Bank has echoed the ultimatum of the President of the European Commission. Bundesbank head Jens Weidmann warned on Saturday that if Greece backs out of agreements with international creditors, there will be no basis for further financial aid to the country.“If Athens doesn't stand by its word, that is a democratic decision – but that means the basis for further financial aid falls away,” Jens Weidmann told daily Sueddeutsche Zeitung.The Bundesbank chief also noted that if Athens leaves the single currency, “the consequences for Greece would be more serious than for the rest of the eurozone.'”
Germany’s message to the markets is that the eurozone countries are “more than comfortable allowing Greece to fail” if Athens rejects the austerity measures pre-conditioned for another bailout, Margaret Bogenrief, partner with crisis management firm ACM Partners, told RT.Greece wants to benefit from being in the eurozone without paying the price, argues Bogenrief. She believes Athens is isolating itself from the rest of Europe, which is elaborating a plan to “say goodbye to Greece”. If Athens exits the euro, which is ultimately going to happen according to Margaret Bogenrief, the Greek banking system will fail due to the trillion-euro debt it owes to various world banks.
The Greek perspective
A new round of political crisis unraveled in Greece on Saturday when Socialist party leader and former finance minister Evangelos Venizelos played back from forming a coalition with other parties. Venizelos announced he plans to hand back the mandate to President Karolos Papoulias.If a last-ditch attempt to form a national unity government fails, new elections will follow, probably accompanied by a drop-out from the eurozone.Greeks are deeply divided over the harsh budget cuts which came as the price for international cash injections. The split greatly influenced the results of the recent parliamentary election, with no party gaining enough seats to form a government.Both former dominant parties of Greece, the socialist PASOK and the conservative New Democracy, have lost supporters. Tsipras’ Radical Left Coalition gained the most, ending up with 16.8 per cent of the votes (52 seats in the 300-member parliament).The leader of the Radical Left Coalition Alexis Tsipras admits that new elections will change nothing. But he says he is deliberately escalating the overheated situation in Greece because “the time of truth for all has come,” his statement says.