Minister tells Greece to exit eurozone

BERLIN - Agence France-Presse

Hans-Peter Friedrich.

Germany’s interior minister came out strongly on Feb. 25 in favor of Greece leaving the eurozone, arguing that this would improve its chances of becoming competitive again.

“I do not mean that Greece should be kicked out of” the 17-nation eurozone, said Hans-Peter Friedrich in an interview with news magazine Der Spiegel, “but to create incentives for an exit that they cannot turn down.”

“Outside of the European monetary union Greece’s chances of regenerating itself and become competitive are definitely bigger than if it remained inside the eurozone,” said Friedrich. He was speaking ahead of a vote by German lawmakers today on a further 130 billion euros ($175 billion) in loans for Greece.

Under a plan hammered out by eurozone finance ministers, Greece would receive up to 130 billion euros in direct loans by 2014 in return for tough new austerity measures and tighter EU-IMF oversight of its economy. A private creditor bond writedown is worth another 107 billion euros. Germany is the biggest contributor to eurozone bailouts. The latest plan for Greece would be financed via the European Financial Stability Facility.