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Greek exit from euro would be ‘catastrophic’

  • 17/09/2012
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A Greek exit from the single currency would be a "catastrophe", the country's prime minister reiterated over the weekend.

Antonis Samaras told the Washington Post that an exit from the euro had to be avoided at all costs, as he once again called for more time for Greece to implement spending cuts.

Greece is currently trying to finalise a package of €11.5bn (£9.3bn) of spending cuts over the next two years, to ensure it qualifies for the next tranche of its second €130bn bailout.

Samaras (pictured) said Greece had to “make sure that we abide by what we have signed because we believe that what they call a ‘Grexit’ is not an option for us. It would be a catastrophe.”

However, while the PM was keen to stress Greece’s commitment to cutting back spending, Samaras added the country would benefit from more time to implement further austerity measures.

“Instead of the [cuts package] taking place over two years, it would be best if it were to take place over four years,” he said.

“We are talking about an extension to 2016.”

There are indications some creditors – such as the International Monetary Fund (IMF) – are considering giving Greece more time.

On Friday, at a Eurogroup finance ministers meeting, IMF head Christine Lagarde hinted Greece’s creditors may accommodate them.

“Greece has already produced a huge effort but will have to continue to do so,” Ms Largade said.

“The target when it comes to achieving debt sustainability is very high, so there are various ways to adjust. Time is one that needs to be considered as an option.”

However, another extension may be too much for the Germans too take.

Rainer Bruederle, parliamentary leader of the Free Democrats Party, said last week: “I can’t imagine that a further package for Greece would get a majority in the Bundestag, or in the governing coalition.

“We Germans are helpful, but we’re not stupid.”

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