U.K. Prime Minister David Cameron said European leaders should make contingency plans for a Greek exit from the European single currency.
Greeks will go to the polls again next month after their political leaders failed to form a governing coalition following the last election. Cameron, speaking to reporters in Chicago at a North Atlantic Treaty Organization meeting following a Group of Eight summit, said the voting could decide whether the country keeps the euro.
“They can vote to stay in the euro-zone and meet their commitments, or they can vote to give up on their commitments and, in effect, give up on the euro-zone,” Cameron said. “I think the point that was very clear from the G-8 was that the euro-zone has to put in place the most robust contingency plans for both eventualities.”
Speaking during the G-8 at Camp David, European Council President Herman Van Rompuy and European Union President Jose Barroso refused to discuss such plans. Barroso said “Plan A” was for Greece to stay in.
Cameron denied he is turning the Greek election into a referendum on the euro. “It’s up the Greeks how they arrange their election, what they do and don’t say, how people do and don’t vote but we’ve got to make sure it’s a moment of clarity and decisiveness for the euro-zone,” he said.
The prime minister warned against putting off decisions. “What would be bad for Greece, bad for Europe and bad for the world is if we just allowed the can to be kicked further down the road with an inconclusive outcome,” he said. “What’s required is decisiveness. There needs to be a resolution because it’s the lack of resolution that’s leading to a lack of confidence.”
Cameron denied the G-8 meeting had been a failure, saying it had “helped to crystallize the thinking.”
There’s no mechanism for a country to leave the euro, and a Greek exit would increase market pressure on other European countries deemed to be vulnerable.
The yield on a benchmark Spanish 10-year government bond closed at 6.2 percent on May 18, near a five-month high.