NEWS

Schaeuble’s Grexit proposal under scrutiny 

schaeuble-s-grexit-proposal-under-scrutiny

Memories of the turbulent month of July 2015 have been revived by the verdict of Germany’s Federal Constitutional Court stating that the government of Chancellor Angela Merkel did not fulfill its constitutional obligations when it submitted the infamous proposal by its finance minister at the time, Wolfgang Schaeuble, to the Eurogroup for a temporary exit of Greece from the eurozone.

Citing Article 23, Paragraph 2 of the German Constitution, the court’s verdict, issued on the appeal of the Green party, stressed that the German government had to inform the Bundestag in full and as soon as possible about its negotiations in the EU.

The court found that the impact of a Greek exit would have required “particularly intensive parliamentary involvement.”

In the proposal on July 10, at the height of the Greek financial crisis, Schaeuble stated that there could be no basis for a new aid program to Greece based on the proposals made to the Eurogroup by the Greek authorities, and that there were only two ways forward: Either that the Greek authorities improved their proposals quickly and significantly, with the full support of the German parliament, or that Greece would have to consider a “time out” from the eurozone, with a possible debt restructuring, for at least five years.

The court said that between July 9-11, the federal government held extensive consultations with the governments of other members of the eurozone with the main goal of finding a solution that would allow Greece to remain in the eurozone. It noted that it was within this context that Schaeuble raised these options for Greece if the negotiations failed. 

The German government forwarded the July 10 document to the Bundestag on the afternoon of July 12, after the eurozone had already begun discussing the proposal during the summit which began on July 11 to decide the fate of Greece.