* Syriza rules out ‘Grexit’ option
The German government wants Greece to stay in the eurozone and there are no contingency plans to the contrary, Vice Chancellor Sigmar Gabriel said in an interview on Monday, responding to media reports that Berlin believes the currency union could cope without Greece.
Gabriel, the Economy Minister and leader of the centre-left Social Democrats (SPD), also told the Hannoversche Allgemeine Zeitung that the eurozone had become more resilient in recent years and could not be "blackmailed", according to the EU news and policy site EurActiv.
"The goal of the German government, the European Union and even the government in Athens itself is to keep Greece in the eurozone," Gabriel said in the interview.
"There were no and there are no other plans to the contrary," he said, and noted the eurozone had become far more stable in recent years.
"That's why we can't be blackmailed and why we expect the Greek government, no matter who leads it, to abide by the agreements made with the EU," he said referring to the January 25 election and possible change of government.
Earlier, a spokesman for Chancellor Angela Merkel, Georg Streiter, said the German government expects Greece to stick to the terms of its 240 bln euro EU/IMF bailout agreement.
Streiter declined to comment on a report in Der Spiegel on Saturday that said Berlin had shifted its view and now believed the eurozone would be able to cope with a Greek exit, or "Grexit", if necessary.
Der Spiegel reported that Berlin considers a Grexit almost unavoidable if the left-wing Syriza opposition party, narrowly ahead in opinion polls, wins Greece's election. Syriza wants to cancel austerity measures and a chunk of Greek debt.
But the report said that both Merkel and Finance Minister Wolfgang Schaeuble now believe the eurozone has implemented enough reforms since the height of its debt crisis in 2012 to make a potential Greek exit manageable.
In addition, the eurozone now has an "effective" bailout fund, the European Stability Mechanism (ESM), another source added. Major banks would be protected by the banking union.
As the eurozone's paymaster, Germany is insisting that Greece must stick to a course of austerity and not backtrack on its bailout commitments – especially as it does not want to open the door for other struggling eurozone members to relax their reform efforts.
Peter Bofinger, one of the "wise men" council of economic advisers to the German government, warned against a Grexit.
"There would be many high risks for the stability of the eurozone with such a step," he told Welt am Sonntag. "It would let a genie out of the bottle that would be hard to control."
French president Francois Hollande told France's Inter radio on Monday that Greece had paid a heavy price to stay in the euro and it was "up to the Greeks" to decide whether to now remain a part of the single currency.
Repeating a much-expressed view that the eurozone needs to focus more on growth and less on reducing its deficit, Hollande also said "Europe cannot continue to be identified by austerity."
In earlier comments to EurActiv Greece, Syriza said it has decisively ruled out the “Grexit” option, according to EU Parliament Vice President and MEP Dimitris Papadimoulis.
Since the announcement of the presidential vote in Greece, several reports in Europe have claimed that international markets would not trust a Syriza government, and that the main opposition party has the so-called “Back to Drachma Plan B”.
Papadimoulis, an influential figure in Syriza that is currently ahead in the polls, attempted to dash these fears, saying that a Syriza government is committed to keeping the country in the eurozone.
“There is absolutely no case for a Grexit. Those who invoke such a possibility play a propaganda game against the Greek and European economy,” he said.
Papadimoulis added that the real danger for Greece is its social disintegration and its transformation into a “debt colony” and for Europe, a new phase of recession, higher unemployment and poverty.
In an attempt to appease international lenders and possible investors’ fears, Papadimoulis made it clear that there is no Syriza party member who speaks in favour of returning to the drachma.
“All our members respect the party’s decisions which are pretty clear… We will seek a solution for Greece within the eurozone,” he stated, blaming a significant part of the Greek press for badmouthing his party's policies.
Papadimoulis’s main argument for the non-Grexit scenario was based on the fact that Greece is still a systemic danger for the eurozone.
