Brussels, 29/07/2015 (Agence Europe) - A committee of five experts responsible for advising the German government finds that as a last-resort solution, a eurozone country should be able to leave the eurozone if it is not able to pay back its debt.
“A country which is permanently uncooperative should not be able to threaten the existence of the eurozone”, states the German council of economic exports, in a report on the governance of the Economic and Monetary Union (EMU) which was published on Tuesday 28 July. According to Christoph Schmidt, who led the work, it is quite obvious that the electorate of the creditor countries would be disinclined to go on providing the debit countries with finance “indefinitely”, El País reports.
This position backs up that of the German finance minister, Wolfgang Schäuble, who had tabled the idea of Greece leaving the Eurozone temporarily towards the end of the recent discussions between Athens and its inter-institutional creditors (see EUROPE 11358). This solution, the economic and political consequences of which to Greece and the eurozone nobody has been able to calculate, was not ultimately retained.
Reacting to the report, the German Secretary of State for the Economy, Rainer Sontowski, stated in a press release that the five experts “have perhaps underestimated the political will for a united Europe”. He said that the German authorities are reflecting “actively on additional measures to complete” EMU.
Insolvency mechanism. The five German experts are looking into the creation of an insolvency mechanism, through which the creditor countries would write off their losses in the event of the bankruptcy of a eurozone country. No state in question has yet resolved itself to such an eventuality.
The experts also cast doubt on the ideas put forward by France and Italy to develop the EMU by such means as a specific budget for the eurozone (see EUROPE 11367). The support of the general public for such a measure is “certainly not there”, they argue. (Mathieu Bion)