Regling: Grexit would reduce the income of Greeks by 25%

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Thirty years ago, on February 7, 1992, the history of the euro began with the signing of the Maastricht Treaty. Reason for an interview Süddeutsche Zeitung by Klaus Reglingwho knows the one European currency as few. Its title is “The Stability Pact must be reformed”.

The German newspaper notes about Klaus Regling: “Initially he drafted the rules for the Stability Pact on behalf of the German government. In 2004 moved legally against Germany on behalf of the Commission, when Berlin violated the rules. And now Klaus Regling, head of the European ESM Support Mechanism and largest creditor Greece wants to radically change the rules of the Stability Pact, allowing for exceptions, raising the debt-to-GDP ratio from 60% to 100% and creating a permanent fund for countries in crisis. Proposals that could spark heated discussions with the German Finance Minister Christian Lindner“who would not want changes in either the debt ceiling or the budget deficit,” the Munich newspaper wrote.

The interview could not bypass the culmination of the European crisis starring Greece. To the question why Klaus Regling disagreed with the position of the then Minister of Finance Wolfgang Schieble for the expulsion of Greece from the euro, the head of the ESM answers:

«We never disagreed for life “, says Klaus Regling:” I respect his arguments. He wanted to put pressure on the eurozone countries to respect the rules. However, I considered that the price for the Greeks was too high. Already, due to the crisis, their income had fallen by 25%. For the most part this adjustment was necessary to reduce inequalities. However, there were calculations according to which the exit from the euro would mean a reduction of incomes in Greece by an additional 25%, which would lead to even more acute social problems. “Besides, a Grexit would change the character of the eurozone.”

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Stefanos Georgakopoulos

DW

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