Varoufakis warns Greece to exit from the euro – SPIEGEL ONLINE

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Everything but get out of the Euro. Greece Finance Minister Giani Varoufakis will prevent leakage of his country from monetary union at any cost. The reintroduction of the old currency drachma would Greece throw back to the Stone Age, Varoufakis said, according to the news agency dpa at a seminar, which was broadcast on Greek television. It would indeed have been better if Greece had not even joined the euro area, Varoufakis said. Then the country would have been able to improve its competitiveness through currency devaluation. But a return to the drachma and an exit from the monetary union, he was not. “Once you’re inside, then there is no way out.”

Greece threatened with insolvency if it gets no new money in the coming weeks. The euro countries and the International Monetary Fund (IMF) block the disbursement of basically promised 7.2 billion euros, which date from one of the two bailouts for the country.

If Greece does not get the money, it would be soon bankrupt. An exit from the monetary union would probably, but not necessarily. Whether the country can remain in the euro will depend namely mainly about whether the European Central Bank (ECB) continues to supply the Greek commercial banks with euro. According to its statutes, the ECB must set these supplies as soon as the solvency of banks is at risk. In the event of a sovereign default which is expected to happen quickly, because then the government bonds worthless in one fell swoop would be in banks’ balance sheets.

Weidmann criticized bailouts of the ECB

Already there are doubts about the policy of the ECB, which allows the Greek central bank to keep domestic banks with emergency loans afloat. Especially clearly speaks Bundesbank President Jens Weidmann from his discomfort. “The fact that banks without market access loans be granted to fund bonds of their own state, which is even without access to the market, I think, overlooking the prohibition on monetary state financing is not in order,” Weidmann told the “Handelsblatt”.

He warned against misuse of the central bank. “The decision on the future of Greece in the currency union is clearly in the policy,” said Weidmann, who sits as president of the Bundesbank and the Council of the ECB.

In fact, the ECB has become a major player in the Greek debt drama. You not only decide on the emergency loans for Greek banks, but also negotiated as part of the donors Troika on the reforms that will take the country.

In the books of the ECB are Greek government bonds with a volume of more than 20 billion euros, which has been bought as part of a first aid program in 2010, the central bank. Starting in July, the first of these bonds will be due, but Greece has no money to repay the loans.

Finance Varoufakis would postpone the repayment of the bonds like backwards. “These bonds should be postponed into the distant future. That is clear,” Varoufakis said on Thursday. For this purpose he would gladly exchange the papers for new ones. By his own admission, he does not believe the fact that ECB President Mario Draghi will engage in it. . “The idea of ​​an exchange are added Mr Draghi’s soul in fear,” Varoufakis

said summary: Greece Finance Minister Giani Varoufakis wants to avoid an exit of his country from the euro. For this purpose, the European Central Bank (ECB) has to approve further bailouts for Greek banks. It but there is strong criticism of Bundesbank President Jens Weidmann. He warned the ECB against continuing this policy.