Ex-PM Simitis says euro exit would be a ‘catastrophe’

Greece must be part of the euro area and it would be a ?catastrophe? for the nation to revert to using its own currency, former Greek Prime Minister Costas Simitis said.

?There?s no question we must belong to the eurozone,? Simitis said at a forum in Beijing on Tuesday. ?The idea of coming back to the drachma is an idea that cannot function.?

Luxembourg Prime Minister Jean-Claude Juncker said late on Monday that talk of Greece leaving the euro was ?nonsense? and ?propaganda? as the nation?s political impasse since its inconclusive May 6 election looked set to continue for a second week. President Karolos Papoulias failed to secure agreement on a unity government and avert new elections with the country heading toward a possible exit from the euro area.

A retreat from Europe?s economic and monetary union is a ?discussion without sense,? Simitis said, adding that it would be a ?catastrophe? for Greece to no longer have the euro as its currency.

A Greek withdrawal from the euro could be ?technically? managed yet would damage confidence in the monetary union, European Central Bank Governing Council member Patrick Honohan said on May 12. ?It is not necessarily fatal, but it is not attractive.? [Bloomberg]