Greece Considering Withdrawing from the Euro Zone: Spiegel

By May 6, 2011, 12:43 PM Author's Blog  

Germany’s Spiegel Online reports that Greece has raised the possibility of leaving the euro zone in discussions with the European Commission and other member states.

The magazine said alarmed by Athens’ intentions the European Commission has called a highly confidential meeting in Luxembourg on Friday evening, with only the euro-zone finance ministers and senior staff members permitted to attend. In addition to Greece’s possible exit from the currency union, a possible restructuring of its huge debt would be on the agenda of the meeting.

“The government has raised the possibility of leaving the euro zone and reintroducing its own currency,” the report said.

Spiegel also said it has received information from German government sources knowledgeable of the situation in Athens, suggesting that George Papandreou’s government — which is facing massive economic problems and protests against austerity measures being held almost daily — apparently feels it has no other option but to leave the euro monetary union and reintroduce its own currency.

One year following the Greek crisis, the development most likely represents a potentially existential turning point for the European Union — irrespective which alternative is eventually decided upon for dealing with Greece’s enormous problems.

Update:

A Greek government official is denying Spiegel’s report, according to the Associated Press. The official said the Finance Ministry would be issuing a full denial soon.

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