ECONOMY

Line drawn on support for Greece

BRUSSELS – The eurozone is taking protection measures in case Greece exits the group of countries that use the single currency, the head of the Eurogroup, Jean-Claude Juncker, said on Thursday, while French President Nicolas Sarkozy expressed satisfaction regarding the progress of negotiations for the formation of a coalition government in Greece.

At the same time, the process of strengthening the temporary European Financial Stability Facility (EFSF) is being accelerated so that the new fund can protect other member states, such as Italy and Spain, as well as European banks.

After Sarkozy and German Chancellor Angela Markel admitted publicly that the possibility of Greece leaving the eurozone is no longer a taboo subject, Juncker, one of Athens?s strongest supporters to date, told a German television station that he wants the debt-burdened country to stay in the eurozone, ?but not at any price.?

Asked what would happen should Greece abandon the euro, the Luxembourg prime minister, in an effort to appease public opinion and the markets, responded: ?We are working so as to secure that it will not spell a disaster for the citizens of Germany, Luxembourg and the eurozone. We are absolutely prepared for such a possibility. We cannot constantly ride a rollercoaster with the Greek issue. We need to know where we are heading and Greeks must say where they want things to go.?

Sarkozy expressed his relief about afternoon developments in Athens, branding New Democracy leader Antonis Samaras?s proposal for an interim government to ratify the new loan agreement and then hold elections ?courageous and responsible.?

Meanwhile banks, Greek authorities and other officials are still working on a proposed bond exchange, even as political turmoil casts doubt on when Greece?s next rescue package might be implemented.

?We assume that the agreement reached on October 27 would remain in operation,? said Hung Tran, deputy managing director of the Institute of International Finance, a Washington-based banking trade group that negotiated the bond exchange as part of marathon talks in Brussels last week.

Work on technical details continues, even though there is no time line for when the swap and broader rescue effort might take place.