Greece denies eurozone preparing contingency plans for break-up

Telegraph staff and agencies

6:47PM BST 23 May 2012

Greece has denied that eurozone officials had recommended member countries prepare for the country's possible departure from the single currency.

A Greek flag flies next to a statue of ancient Greek philosopher Socrates in the center of Athens on Wednesday. After an inconclusive vote on May 6, Greece is heading for a second general election on June 17, which is widely seen as a referendum on whether it should stay in the euro. Photo: AFP

"The Greek finance ministry categorically denies the reports that it was requested during a Eurogroup telephone conference that eurozone members prepare plans for handling the possible exit of Greece from the eurozone," a government statement said.

Early on Wednesday, Reuters reported that it had seen a memo issued by the Euro Working Group (EWG) calling eurozone countries to prepare policies that would lead to an "amiable divorce" should Greece exit the euro.

One official told the newswire: "The EWG agreed that each eurozone country should prepare a contingency plan, individually, for the potential consequences of a Greek exit from the euro. Nothing was prepared so far on the eurozone level for now, for fear of leaks."

Greece's former prime minister Lucas Papademos said on Tuesday that plans for a Greek euro exit "cannot be excluded," while Czech president Vaclav Klaus declared that "it would be much better for Greece to leave the eurozone."

Asian and European shares dived and the euro hit a 22-month low on Wednesday over concerns for Greece.

 

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After an inconclusive vote on May 6, Greece is heading for a second general election on June 17, which is widely seen as a referendum on whether it should stay in the euro.

The radical leftist Syriza party, which wants to tear up Greece's unpopular bailout deal with the European Union and the IMF, came second on May 6 and is expected to emerge in a strong position in the next ballot.

Alexis Tsipras, Syriza's leader, said yesterday that a vote for Syriza was Greece "chance to save the euro," while Greece's centre-right leader, Antonis Samaras, branded his election rival "naive and dangerous".

European leaders have warned if the next government reneges on promised reforms that Greece cannot hope to continue drawing international loans, which would likely lead to its exiting the eurozone.

Greece denies eurozone preparing contingency plans for break-up - Telegraph