Merkel ally says Greece should leave eurozone as leaders seek way out

Eurozone finance ministers will seek agreement Monday on unlocking vital loan aid for Greece, as the pressure is rising among the 17 countries that share the debt-challenged currency to leave the most debted member out of the monetary unity.

A woman walks by an ad promoting the privatization of the national lottery in Athens. The EU and the IMF urge the Greek government to privatize assets as son as possible.

A woman walks by an ad promoting the privatization of the national lottery in Athens. The EU and the IMF urge the Greek government to privatize assets as son as possible.

The eurozone countires will meet in Luxembourg from 1500 GMT on Monday, with their priority to reach an understanding about whether Greece should get an eight-billion-euro loan, blocked by the IMF for the past month.

International auditors spent the weekend trying to obtain the up-to-date picture of Greece’s finances and forecasts, after protests, including staff occupations of ministries, meant a slow resumption of negotiations last week.

The auditors returned to Athens on Thursday, four weeks after an abrupt departure.

European Union economic and monetary affairs commissioner Olli Rehn will give the ministers the inside track on what the Washington-based IMF wants to do, as looming recession risks turning Greece’s crisis into global catastrophe.

There remains the spectre of imminent default, as anticipated by markets treating Greek sovereign bonds as monopoly bets.

Athens is laboring under a crushing 350 billion euros or more of debts, with its stripped-bare economy already on its knees, and the government says it needs the loans to pay salary and other bills this month.

In Germany, the deputy leader of the Christian Social Union, or CSU, one of three parties in Chancellor Angela Merkel’s center-right coalition, said on Sunday Greece may be better off leaving the eurozone if it cannot restore its fiscal health.

Alexander Dobrindt told Deutschlandfunk radio that a Greek exit from the euro would be a last resort measure and that Greece would find it easier to recover outside the currency bloc.

“I believe it is a solution, if one wants to bring Greece back into a economically stable competitive condition, that this would be done outside the euro zone,” he said.

Merkel, leader of the Christian Democrats, or CDU, and Finance Minister Wolfgang Schaeuble have spoken out against Greece leaving the euro zone. Merkel has warned that or a Greek default could trigger a domino effect.

The Free Democrats, or FDP, the third party in the coalition, also has spoken out against a Greek exit. But Horst Seehofer, the leader of the arch conservative CSU, has said he could not rule out Greece leaving the eurozone.

Dobrindt went further than Seehofer in the Deutschlandfunk interview on Sunday, saying he believed that many Greeks themselves would perhaps soon realize their country’s fiscal health could be more quickly restored outside the euro zone.

“It’s quite possible that it’s dawning on Greeks that restructuring their economy outside the euro zone for a limited time period would be easier than inside the euro zone,” Dobrindt said. “And that’s why we’ve been saying: it must be possible to leave the euro zone.”

He added: “It must be possible to temporarily leave the euro zone to restore the fiscal health and restructure the economy.”

Josef Ackermann, head of Deutsche Bank, meanwhile, opposed revision of Greek debt deal. Changing the terms of voluntary private sector participation in a bailout for Greece agreed in July could cost the support of private investors, Ackermann told the Sunday edition of the Greek newspaper Kathimerini.

Sunday, October 2, 2011
BRUSSELS – Agence France-Presse