‘Greece Out, Euro Dead’: Will Other European PIGS Also Get Infected?

Written by | Tuesday, February 10th, 2015

Greek Prime Minister Alexis Tsipras presented plans on Sunday (8 February) designed to dismantle what his party views as a “cruel” austerity programme imposed on it by the European Union and International Monetary Fund (IMF). This new plan effectively rules out any extension of its €240 billion international bailout, which will likely lead to an outright clash with his European partners at a summit in Brussels later this week. Speaking to the parliament, Tsipras presented a series moves aimed at reversing the current reform course to heal the perceived “wounds” of the austerity measures, including cancelling a property tax, reinstating pension bonuses, ending mass layoffs and raising the minimum wage back to pre-crisis levels.

Meanwhile, Greek finance minister Yanis Varoufakis warned in an interview with Italian state television network RAI on Sunday that if his country is forced to leave the eurozone, Italy and Portugal could follow soon after. Particularly Varoufakis’ claim that “The euro is fragile, it’s like building a castle of cards, if you take out the Greek card the others will collapse,” was quickly denounced by Matteo Renzi’s government in Rome. “I would warn anyone who is considering strategically amputating Greece from Europe because this is very dangerous. Who will be next after us?” said the Greek finance minister, thus effectively suggesting that Portugal, Italy and other countries were effectively bankrupt.

His Italian counterpart Pier Carlo Padoan countered that Varoufakis’s remarks were “out of place”, stressing that Italy’s debt burden, currently at 132 percent of GDP, in contrast to Greece’s 175 percent, was “solid and sustainable”. For his part, Alan Greenspan, former U.S. Federal Reserve (FED) chairman, expressed his highly pessimistic view on the sustainability of Greece’s position in the eurozone, stressing that the country’s exit from the currency bloc was “just a matter of time”. In an interview with the BBC on Sunday, Mr Greenspan also said that “I don’t see that it helps them to be in the euro and I certainly don’t see that it helps the rest of the eurozone.”

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