Saturday, January 3, 2015

Beginning Of The End?

From the DW:
"Germany 'prepared to let Greece leave eurozone' if voters reject austerity"

A German report has said Chancellor Angela Merkel is prepared to let Greece quit the eurozone, should the people elect a government that abandons austerity. Berlin is increasingly convinced a "Grexit" would be bearable.   The German government is prepared to countenance a Greek exit from the eurozone, should it prove necessary, according to a report from German news magazine Der Spiegel. The magazine reported in its online edition on Saturday that Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble believe that such a development would now prove bearable for the rest of the currency bloc. The report cited progress made in the eurozone since 2012, when the eurozone sovereign debt crisis was said to have been at its worst, with fears diminishing that a "Grexit" could cause the currency union to disintegrate. "The danger of contagion is limited because Portugal and Ireland are considered rehabilitated," Der Spiegel quoted a government source as saying. In addition, the European Stability Mechanism (ESM), the eurozone's bailout fund, was now seen as an effective and available rescue mechanism. Major banks would be protected by the banking union. Any such policy shift has yet to be confirmed by the German government, with Berlin previously having been keen to keep Greece within the bloc.

^ If any country is allowed to leave the Eurozone then it will be a domino effect and others will follow which will weaken the Euro. ^

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