DAVOS, Switzerland — Germany has not modeled a potential Greek exit — the so-called “Grexit” — from the 19-nation eurozone, Germany’s finance minister insisted Jan. 23, two days ahead of a Greek election that may bring an anti-bailout party to power in Athens.
“We don’t model any exit,” Wolfgang Schaeuble said at a panel at the World Economic Forum in the Swiss resort of Davos.
The potential of a “Grexit” has resurfaced ahead of the election, which opinion polls suggest will see the left-wing SYRIZA party come first ahead of Prime Minister Antonis Samaras’ center-right New Democracy.
While praising Greece’s better-than-expected efforts to get its economy in order, Schaeuble warned that Greece won’t be allowed to benefit from the European Central Bank’s new stimulus program if the government in Athens ditches the reform program required for bailout cash.
On Jan. 22, ECB President Mario Draghi announced a 1.1 trillion-euro ($1.25 trillion) bond-buying program to spur the economy of the 19 nations who share the common euro currency. Greece can take part but only on certain conditions.
Greek shares surged another 6 percent on Jan. 23, suggesting that investors think SYRIZA would compromise, especially as polls suggest the majority of Greeks want to keep the euro.
SYRIZA, led by 40-year-old Alexis Tsipras, has talked of a massive debt forgiveness program and riding roughshod over the bailout deals. Greece has received bailout commitments worth 240 billion euros ($269 billion) to deal with its debts after it was locked out of international bond markets.
Tsipras has described the austerity measures Greece has had to implement in return for the bailout money as “fiscal waterboarding,” a description that Schaeuble dismissed as electioneering.
Schaeuble also rejected suggestions that Germany or Europe was responsible for the economic hardship in Greece. “The reasons for the problems of the Greek people are the mistakes in the past,” he said.