Eurozone leaders prepare for Grexit

On one level, a government minister confirming that their colleagues are discussing the possible break-up of the eurozone is hardly a surprise. It would have been far more controversial had Finland’s foreign minister Erkki Tuomioja pitched up on the World at One this afternoon and told Martha Kearney that eurozone finance ministers were not engaged in contingency planning at some level. But Tuomioja’s comments that a Grexit was ‘something that everybody in every ministry of finance and in central banks, and national central banks, is looking into’ are still significant as they show politicians are less worried by the effect public hints about an exit will have and more by the inevitability of that exit. Tuomioja said:

‘We certainly do not hope this will happen. But without further support or changes into its programme it looks likely. Nobody is forcing Greece out, and it is up to the Greeks themselves to make this decision if that were to be the case.’

Arguing that it would not ‘necessarily’ be ‘that devastating’ for Greece to leave the euro, he added that ‘the more important question is – is there a will and is there a method to keep the euro together with or without Greece?’ He wasn’t the only one to speak out on this today: on the same programme Dr Michael Fuchs, the deputy leader of Angela Merkel’s party in the Bundestag also gave a hard line on Greece’s membership of the euro. He said:

‘Either they cut costs, like the OECD said, by 40 per cent, which I doubt will be possible, because it’s very difficult to cut all costs by 40 per cent. On the other hand, it’s very clear if Greece cannot cut costs by that they have to just leave the euro and devalue. It’s a question, whether likely or not, I think it’s necessary, and it’s the only way.’

Fuchs has one eye on next year’s German federal elections, which he admitted on the programme. But these two interviews show that eurozone politicians are starting to edge closer to what they have long feared saying: that the break-up of the currency union in its current form is inevitable.