There is “zero chance” of Greece leaving the eurozone, Greek Prime Minister George Papandreou said on Friday after suggestions by German Chancellor Angela Merkel that members should face expulsion if they do not comply with the euro’s financial criteria.
Papandreou was commenting after meeting with European Commission President Jose Manuel Barroso in Brussels, where the Greek Prime Minister refused to rule out the possibility of Athens turning to the International Monetary Fund for financial assistance in what is becoming an increasingly tense game of cat-and-mouse between the PASOK government and the other eurozone members, in particular Germany, who are unwilling to commit to the idea of lending Greece money.
At the same time, many experts believe that in the end the eurozone members, including Germany will have to come up with an appropriate package for Greece.
“Certainly, I would say there is zero possibility of [Greece] leaving the eurozone,” said Papandreou.
Earlier, Merkel said that Greece “has shown a lot of courage” in adopting austerity measures to trim its public deficit but suggested that countries should be kicked out of the eurozone “as a last resort” if they ignore its financial rules “again and again”.
Germany has resisted efforts to bring to a close an agreement for Greece to receive financial assistance from some of the other larger eurozone members, probably in some form of bilateral loan.
Merkel insisted that she would not make any “rash” decisions to give Greece help. However, the issue is expected to dominate discussions when EU leaders meet later this week on March 25 and 26.
“The European Commission has been actively working with euro-area member states on designing a mechanism of coordinated assistance,” Barroso said after his meeting with Papandreou.
The Greek PM, refused to rule out the possibility of the government turning to the IMF for help if the Europeans do not offer any. “We have to keep all options open for whatever possibility,” he said. “We would certainly prefer a European solution.”
Papandreou added that if EU leaders manage to reach an agreement on providing Greece with financial assistance if needed, it would encourage markets to lower the “unreasonably high interest rate, which is over 6 percent” that they are charging to take on Greek debt.
