Eu­ro­zone work­ing on plan B for Athens

Kathimerini English - - Business -

The eu­ro­zone is con­sid­er­ing al­ter­na­tives to save Greece from bank­ruptcy should the coun­try’s par­lia­ment re­ject the midterm fis­cal plan re­quired by its cred­i­tors, a Euro­pean Union of­fi­cial told AFP yes­ter­day.

“Be sure, we’re work­ing on it, we’re not only think­ing about it,” the of­fi­cial said on con­di­tion of anonymity. “The next step is not a de­fault of Greece,” the of­fi­cial said, re­fus­ing to pro­vide de­tails on the plan.

This con­sti­tutes a de­par­ture from the rigid po­si­tion that only planned for Par­lia­ment to vote for the new aus­ter­ity pro­gram in or­der for the gov­ern­ment to re­ceive the fifth tranche of its in­ter­na­tional bailout, amount­ing to 12 bil­lion eu­ros.

The pos­si­bil­ity of a “no” vote to the plan is al­ready mak­ing Euro­peans con­tem­plate other so­lu­tions, with Ger­many’s Deputy Fi­nance Min­is­ter Jo­erg As­mussen telling a con­fer­ence in Ber­lin yes­ter­day that “(a re­jec­tion) isn’t Plan A, or the most likely out­come, but the eu­ro­zone and its fi­nan­cial sec­tors need to make prepa­ra­tions.” So­ci­ete Gen­erale es­ti­mated that there is a 30 per­cent chance of the midterm plan get­ting re­jected.

In an­other sign that Europe is warm­ing to the pos­si­bil­ity of a “no” vote to the plan, a Fi­nan­cial Times com­men­tary raised eye­brows in the Greek gov­ern­ment as it sug­gested for the first time that the plan may not con­sti­tute a so­lu­tion af­ter all. The com­men­tary, ti­tled “Maybe Greek MPs would be right to say No,” ar­gues that “the gov­ern­ment may yet pre­vail. If it does, this will be be­cause of arm-twist­ing more than to the strength of the ar­gu­ment, which is no longer clear-cut.”

Of course the warn­ings about a Greek de­fault con­tin­ued un­abated and will in­crease up to the time Par­lia­ment casts its vote.

Con­ta­gion of Greece’s debt prob­lems to the rest of Europe could be worse than the col­lapse of in­vest­ment bank Lehman Brothers in 2008, Deutsche Bank Chief Ex­ec­u­tive Josef Ack­er­mann said yes­ter­day. “If it is Greece alone, that’s al­ready big. But if other coun­tries are drawn in through con­ta­gion, it could be big­ger than Lehman,” he said at a Reuters bank­ing con­fer­ence.

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