Eurozone could survive Greek exit, Estonia’s finance minister says

The European single currency is in better shape than it was during Greece’s first debt crisis and could now survive the country’s exit, Estonia’s finance minister said Thursday.

“The eurozone is certainly more stable and stronger than five years ago, and a hypothetical chance of a member leaving should have little effect,” minister Maris Lauri said, quoted by Estonias EER public broadcaster.

According to Lauri, Greece would not immediately go bankrupt without a bailout extension as its budget has been in surplus, but it would have to survive on its own.

The Eurogroup on Thursday confirmed that the Greek government had sent a request for a six-month extension to its EU loan programme, which will be discussed Friday.

Europe and Greece are racing to reach a deal to avoid a Greek exit from the eurozone — dubbed a “Grexit” — after previous talks ended in acrimony with both sides digging in their heels.

Wording is key to resolve the feud, with Greece’s ruling leftist Syriza party vowing that it will not apply for an extension to the current bailout programme, and its hated austerity demands, but only an extension to the loan part of the rescue.

Eurozone partners, led by Germany, say the distinction is unacceptable, insisting that any extension include the austerity commitments of the full programme.

Estonia along with fellow former Soviet-ruled Baltic republics Latvia and Lithuania are the newest members of the eurozone, having joined in 2011, 2014 and 2015 respectively.

All three implemented a raft of severe austerity measures to recover from deep recessions triggered by the 2008-9 global financial crisis and so pave the way to eurozone entry.

Now many in the Baltic states are grumbling about Greece’s aversion to austerity.

“If we owed so much money to others and had received so much from them, we would keep quiet and try to be as polite as possible and get along with everybody, to ensure a best possible solution,” Estonian liberal MEP Kaja Kallas told the country’s Vikerradio public broadcaster this week.

“They, however, have a different disposition. Their stance is that you owe us, our people are suffering, you have done us injustice. They ignore the fact that other nations suffer too,” Kallas said.