June 20, 2013
Greek exit from Eurozone manageable but not preferable, says ECB's Asmussen
A Greek exit from the euro zone would be manageable, European Central Bank policymaker Joerg Asmussen was quoted today as saying, although he would prefer it if the crisis-stricken country remained within the single currency bloc.
He also said that the Bundesbank, whose chief ECB President Mario Draghi singled out earlier this month for expressing reservations over the bank's new bond-buying plans, was not isolated in Europe.
The comments on Greece from the ECB executive board member, Germany's deputy finance minister until he took the post at the end of last year, sum up a growing debate in Berlin on the possibility of cutting Greece free.
Most would prefer not to, but an increasing number of MPs and influential figures have come out of the woodwork saying the euro zone is strong enough to deal with the fallout.
"Firstly, my clear preference is that Greece should remain in the currency union," Asmussen was quoted as saying in an advance copy of an interview due to appear in Germany's Frankfurter Rundschau today.
"Secondly, it is in Greece's hands to ensure that. Thirdly, a Greek exit would be manageable."
But Asmussen also warned that a so-called Grexit would not be as orderly as some imagined: "It would be associated with a loss of growth and higher unemployment and it would be very expensive - in Greece, Europe as a whole and even in Germany."
He also said it would be good if the euro zone's permanent bailout mechanism, the European Stability Mechanism (ESM), successor to the European Financial Stability Facility (EFSF), were up and running as soon as possible.
"The ESM is a better instrument for dealing with the crisis than the EFSF," he was quoted as saying.
Germany's Constitutional Court has said it will deliver its ruling on whether the ESM and the fiscal pact are compatible with the German constitution on September 12. Germany cannot legally ratify the two treaties without the go-ahead from the court and the ESM cannot come into effect without German backing.
On euro zone bonds, Asmussen said such common debt was only logical in a full fiscal union and added that they were not crisis management tools.