Last-Minute Talks

Greece's Euro Exit Draws Near

Parthenon, Athenian Acropolis (3/4 perspetive, facade), Athens cityscape. Athens, Greece.
European take-over?
  • Why it matters

    Why it matters

    With the markets nervous, a Grexit could have unforeseen consequences for other euro zone countries, particular fragile southern European economies.

  • Facts


    • The Eurogroup of euro zone finance ministers are meeting on Thursday at 3 p.m. CET in Luxembourg.
    • Chancellor Merkel told the German parliament on Thursday morning that Greece needed to find the will to reach a deal.
    • The Greek Central Bank warned that a default could see the country leaving not just the euro zone but also the E.U.
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Addressing the Bundestag this morning, Chancellor Angela Merkel was one of the few people still sounding positive on the prospects of reaching a deal with Greece to keep the financially strapped country in the euro currency.

“I’m still convinced: Where there’s a will, there’s a way,” she told lawmakers.

But the German chancellor also insisted, once again, that Greece needed to find the will to reach an agreement with its lenders — which means making politically unpopular cuts to government and social spending.

“Taking responsibility and solidarity go hand in hand,” she added, making no indications of any willingness in Berlin to compromise.

While she said the euro zone “had to be a success” she also argued that it was far more robust than five years ago when the Greek debt crisis first flared up.

Her words came just hours ahead of a meeting of euro zone finance ministers in Luxembourg on Thursday afternoon. However, there is little expectation that the ministers will manage to breach the impasse over Greece’s bailout program.

Yanis Varoufakis, Greece’s finance minister, said on Wednesday that a political decision was required to break the deadlock, and that would have to be made by the E.U. leaders at a summit next week.

Time is ticking, with a massive debt repayment due to the International Monetary Fund at the end of June when the Greek bailout program runs out. In the absence of a deal to unlock its remaining bailout funds, Greece could rapidly hurtle towards default, and eventually exclusion from the euro zone currency.

However, Athens’ radical left wing government won’t sign up to all the conditions set by its creditors, the IMF, European Central Bank and European Union, saying that the austerity measures won’t help the Greek economy recover and that its people have suffered too many cuts over the past few years.

For Germany, the biggest contributor to the €240 billion Greece has received so far, these reforms, such as pension cuts and VAT hikes, are a necessary step to making the country’s economy more viable.

And while Ms. Merkel has emphasized her deep desire to keep Greece within the euro zone, her finance minister, Wolfgang Schäuble, has consistently taken a tougher stance.

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