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Greece back in euro zone spotlight

Monday, July 23, 2012 - 02:11

Jul.23 - A leading German conservative politician has been quoted as saying Greece should start paying half of its pensions and state salaries in drachmas as part of a gradual exit from the euro zone. Ciara Sutton reports.

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Greece has been thrust back into the euro zone spotlight, as the country prepares for international lenders to arrive in Athens. German politician, Alexander Dobrindt, says the debt-laden should start paying half of its pensions and salaries in drachmas as part of a gradual exit from the euro zone. His comments come after Greek Prime Minister Antonis Samaras described the country as going through a "Great Depression" in a meeting with former U.S President Bill Clinton. Christian Schultz is a senior economist at Berenberg bank. (SOUNDBITE) (English) CHRISTIAN SCHULTZ, SENIOR ECONOMIST, BERENBERG, SAYING: "This is probably just posturing ahead of the negotiations that might potentially happen with Greece. But it must be said that these threats could be quite serious. Even Angela Merkel has said that she doesn't want to see another bailout program for Greece which means she won't have the German parliament, the Bundestag's vote on it. And if there is no vote in the Bundestag, there won't be a third bailout for Greece. So the pressure is really on Greece at the moment." Athens wants to soften the terms of a 130-billion euro bailout agreed last March with the EU and IMF. The country has been hammered by tax hikes, spending cuts and wage reductions conditional to the bailout. But Fidel Helmer of Hauck and Aufhaeuser Bank says Europe is running out of patience. (SOUNDBITE) (German) FIDEL HELMER, HAUCK & AUFHAEUSER, SAYING: "I think it is the right signal because the Greeks are apparently not ready to do their homework and the Europeans are not ready to spend more money. Greece seems to be a bottomless pit and the markets have feared this for a while." Inspectors from the international 'troika', the European Commission, ECB and IMF, will arrive in Athens on Tuesday to discuss just how far off course the country is from its bailout targets. By the end of the year, Greek GDP is expected to have shrunk by about around a fifth in five consecutive years of recession since 2008. Athens must reduce its budget deficit below 3 percent of GDP by the end of 2014, requiring almost another 12 billion euros in cuts and higher taxes. Ciara Sutton, Reuters.

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Greece back in euro zone spotlight

Monday, July 23, 2012 - 02:11