Germany and France: eurozone will not force out Greece

Germany and France were last night forced to insist that Greece would not be pushed out of the eurozone amid new warnings that the single currency was poised to “explode”.

By James Kirkup, and Bruno Waterfield in Brussels

12:10AM BST 15 Sep 2011

Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France held a conference call with George Papandreou, the Greek prime minister. Following the call, the three leaders insisted that Greece, which is still struggling to pay its debts, would not be forced to leave the single currency.

But beyond telling Greece to stick to the austerity measures imposed on it by the European Union and the International Monetary Fund, the German and French leaders announced no new measures to support the eurozone.

Mr Sarkozy’s office last night said that he and Mrs Merkel had “informed the Greek prime minister of the importance attached to the strict and effective implementation of the recovery programme for the Greek economy”. The two leaders were “convinced that the future of Greece is in the eurozone,” the Élysée said.

Mr Papandreou stressed his government’s “absolute determination to take all necessary measures” to meet the country’s obligations.

In a separate statement issued in Athens, the Greek government insisted that “despite recent rumours, all parties stressed Greece will remain in the eurozone”.

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The conference call was held amid mounting expectations that the single currency’s debt crisis will end in either break-up or a major step towards the fiscal integration of its members — a move that Germany has so far resisted.

Jacek Rostowski, the Polish finance minister, gave a bleak warning to the European Parliament yesterday, saying that if the eurozone was to “explode” then “the EU will not be able to survive”.

Despite Mr Papandreou’s assurances, many European politicians are increasingly angry at what they see as Greece’s failure to make progress on the programme of spending cuts demanded in exchange for bail-outs.

José Manuel Barroso, the president of the European Commission, yesterday said that he will soon set out plans for “eurobonds”, loans underwritten by all 17 euro members, to restore investors’ confidence in the currency.

But he said that even that move, which would be hugely controversial in Germany, would not be enough.

“We must be honest: this will not bring an immediate solution for all the problems we face,” he said.

He told the European Parliament: “This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world.”

Mr Rostowski gave an even more stark warning, saying that the EU was on brink of destruction. “Europe is in danger,” he told MEPs. “If the eurozone breaks up, the EU will not be able to survive.”

Without the EU, a pillar of Europe’s security alongside Nato, Mr Rostowski predicted there could be a new war within a generation.

“If the eurozone were to disappear, to explode, then there is a risk,” he said. “A shock of that kind would lead to the demise of the whole European project and that could lead to a situation over a number of years, not immediately, when we are faced with great danger.” Despite last night’s Franco-German assurance, European politicians are still openly discussing Greece’s departure.

Peter Ramsauer, the German transport minister, told a newspaper yesterday that it would “not be the end of the world” if Greece were forced to exit the eurozone.

Germany and France: eurozone will not force out Greece - Telegraph