NEWS

Gov?t rules out eurozone exit

Government spokesman Ilias Mossialos insisted on Thursday that the country?s position within the eurozone was safe after German Finance Minister Wolfgang Schaeuble toughened his stance against Greece, saying that it would be left to the mercy of the financial markets if it fails to meet the conditions for billions of euros in emergency loans.

?There is no threat of Greece exiting the eurozone,? Mossialos said. ?We are proceeding with reforms quickly.?

The comments came after Schaeuble told German state radio that a sixth installment of emergency aid to Greece – an 8-billion-euro loan on which the country?s solvency depends – would only be disbursed ?if Greece actually does what it agreed to do.?

The German minister was referring to reforms the government has pledged to enforce in order to raise sorely needed revenue and plug a yawning budget deficit.

If Greece fails to meet these conditions – subject to an assessment by foreign creditors – then the payments will stop and Greece will face the markets alone, Schaeuble said. ?In that case, Greece has to see how it will gain access to financial markets without help from the eurozone,? he said. ?That?s Greece?s problem.?

Schaeuble?s tough talk on Thursday reflected a growing sense of anger and frustration among Greece?s peers in the eurozone but prompted the immediate intervention of the European Commission.

Once again, EC spokesman Amadeu Altafaj-Tardio struck a conciliatory tone. Responding to reporters? questions about a possible eurozone exit by Greece, Altafaj-Tardio remarked, ?There is no debate at all on that.?

However he echoed Schaeuble in emphasizing the importance of Greece meeting the strict conditions of the bailout. ?It is clear that the provision of financial assistance has always been – for the first program and the successive program – linked to a strong conditionality,? Altafaj-Tardio said, referring to the first bailout granted to Greece by the EC, the European Central Bank and the International Monetary Fund in May last year and a second bailout hammered out in July in Brussels.

The second bailout has been hanging in the balance due to a demand by Finland, subsequently repeated by other member states, that Greece provide collateral as a guarantee for any loans it receives.