Greece’s euro exit risky: Eurogroup - Gayo Lues

“I did say an exit would be manageable. What I meant is that it is technically manageable but politically it is not manageable and it would be linked to unforeseeable risks,” Jean-Claude Juncker was quoted as saying in Austria’s Tiroler Tageszeitung newspaper on Sunday, Reuters reported.

Asked what technically manageable meant, Juncker said: “It means that the Greeks would have to reintroduce their own currency. It would take extreme preparation. But the longer we talk about this, the more people get the hypothesis in their heads that work is being done on this. We are not working on this.”

He said Greece would not quit the zone because he expected Greece to double its efforts to fulfill its reform targets. “But because I assume that Greece will try to redouble its efforts and achieve the targets that have been set, there is no reason to assume that this exit scenario can become relevant.”

Greece is at the epicenter of the eurozone debt crisis and its government has introduced harsh austerity measures in return for an international bailout package that has kept the debt-stricken country’s economy afloat for two years.

“In the case of a total refusal by Greece regarding budget consolidation and structural reforms, one would have to deal with the [exit] question,” said Juncker.

Greece has promised to cut EUR 11.5 billion off its 2013-14 budget in order to get bailed out by other eurozone countries and the International Monetary Fund.

The European Union and the IMF have presented Greece with two rescue packages in return for specific austerity measures, which include the cutting of public sector salaries and pensions, increasing taxes, and overhauling the pension system.

The long-drawn-out eurozone debt crisis, which began in the country in late 2009 and reached Italy, Spain, and France last year, is viewed as a threat, not only to Europe, but also to many of the world’s more developed economies.

KA/JR