German Finance Minister Wolfgang Schaeuble said that Greeks are better off in the euro, for all the efforts required to stay in the single currency.
“The advantages for the Greeks are greater, but it will be strenuous,” Schaeuble said today during a visit to a Berlin school. “The price if they decide to leave the euro is very high.” If Greece left and reintroduced its own currency, it would devalue, he said.
An exit from the euro zone wouldn’t only harm the country leaving, he said. “It would cause a huge amount of turbulence for all of us.”
Stocks and European government bonds fell and the euro weakened to a three-month low on concern that Greece will exit the 17-nation currency union as the political impasse in Athens following inconclusive elections entered a second week.
“We have a very nervous situation in the euro zone,” Schaeuble said. “We have to get Greece back on its feet.”
Chancellor Angela Merkel will host French President Francois Hollande in Berlin tomorrow after his election on a platform of a switch away from the chancellor’s focus on austerity. He also wants to reopen the European Union’s budget treaty to include measures to spur economic growth.
“I think Hollande knows that the fiscal pact can’t be renegotiated,” Schaeuble said.
Even so, Schaeuble said that he was confident Franco-German relations will continue on a good course and that any difficulties will be overcome.
Schaeuble also signalled that he is ready to head the group of euro-area finance ministers. He said the so-called euro group must be led by a finance minister from one of the euro nations after Luxembourg’s Jean-Claude Juncker steps down, and that he has to go to meetings anyway.