German FM says return to Drachma would be wrong

German Finance Minister Wolfgang Schaeuble has told Focus magazine in an interview that a Greek exit from the euro ?is not taboo, but I think it?s wrong,? according to Bloomberg.

Greece?s return to the drachma would be ?catastrophic? for the German economy because it would trigger an appreciation of the euro, damping the country?s exports, Schaeuble told the German magazine.

Allowing countries to exit the euro temporarily would mean ?the beginning of the end? of the single currency, Schaeuble told Focus. German funds directed toward aiding indebted countries are an investment in the euro, he said.

The European Economic Advisory Group (EEAG), a group of leading European economists, recommended earlier this week drastic steps to prevent the EU from having to provide Greece with long-term aid.

The EEAG suggested that Greece should either return to its national currency, the drachma, or launch even tougher austerity measures, including general cuts in wages and salaries.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.