Tsipras warns of ‘the beginning of the end of the eurozone’ if Greek exits
Alexis Tsipras has warned that the failure to agree a rescue deal for Greece would spell the end of the eurozone as he submitted a revised package of reforms to negotiators in Brussels.
The Greek prime minister said if Greece failed, Europe’s leaders would have a bigger disaster on their hands because “it will be the beginning of the end of the eurozone”.
As talks with creditors in Brussels continued over Greece’s proposed reforms in exchange for bailout funds, Tsipras was forced to make a fresh appeal in Athens for his own Syriza party to back him.
His warning on the fate of the eurozone came after what appeared to be a coordinated move by world leaders at the G7 summit to caution Athens against resisting demands by its troika of creditors – the European commission, the International Monetary Fund and the European Central Bank – for further austerity and far-reaching reforms.
The US president, Barack Obama, and the German chancellor, Angela Merkel, said the Greek people should accept the need for painful reforms to put the country on a sound financial footing. The French president, François Hollande, said that if the gap between both sides was unbridgeable and Greece left the eurozone, the currency bloc had sufficient funds to cushion the blow.
In an interview with Italy’s Corriere Della Sera, Tsipras said the suggestion that a Grexit would be easily manageable was flawed. Instead, he argued, it would trigger the unravelling of the whole European project.
“I think it’s obvious. It would be the beginning of the end of the eurozone. If the European political leadership cannot handle a problem like that of Greece, which accounts for 2% of its economy, what would the reaction of the markets be to countries facing much larger problems, such as Spain or Italy which has €2tn of public debt?
He argued that a deal between Greece and her creditors could be close and pledged to discuss recent progress with Merkel and Hollande at the EU-Latin America summit on Wednesday.
But EU officials did little to hide their frustration at what they see as Greece’s lack of compromise in the reform negotiations.
“We will do everything to keep Greece in the eurozone … but our patience is running out,” said the Finnish finance minister, Alexander Stubb.
Jeroen Dijsselbloem, who chairs the Eurogroup of eurozone finance ministers, did not share Greece’s optimism over a deal being within grasp.
“I’ve heard a lot of optimism from the Greek side and it’s an underestimation of the complexity of what’s being asked of them,” Dijsselbloem told the Dutch RTL Nieuws TV station.
