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Schaeuble drops Grexit bomb ahead of elections

German finance minister claims that it was a Greek politician who advocated a withdrawal from the eurozone

Depicted in press reports as an erstwhile supporter of Greece's euro exit, Wolfgang Schaeuble implies that Grexit was the aim of Alexis Tsipras, whose 'democratic sensibility' he doubts

German Finance Minister Wolfgang Schaeuble (Reuters) German Finance Minister Wolfgang Schaeuble (Reuters) With the government and Syriza neck-and-neck in key electoral contests on Sunday, German Finance Minister Wolfgang Schaeuble raised a small political firestorm in Athens when he used a news conference on Thursday to revisit the old spectre of a Greek euro exit.

Asked if Berlin now has a contingency plan in the event of a Syriza win, Schaeuble used the question to launch a thinly veiled attack on Syriza leader Alexis Tsipras, without naming him specifically.

"In Greece there was a debate over an exit from the euro. You [the reporter at the news conference] referred to a politician about whose democratic sensibilities I harbour doubts," Schaeuble said, apparently referring to Tsipras, as the question mentioned Syriza specifically.

"These politicians say it is better if one leaves the euro. There are such in Italy as well," Schaeuble said.

The transcript of the question and response was published in full by the daily Ta Nea today.

In what was viewed in some Greek political circles as a blunt intervention in the Greek electoral process, Schaeuble essentially painted Tsipras as an irresponsible politician who had allegedly maintained that it would be best if Greece left the eurozone.

Schaeuble was at the centre of a recent Financial Times investigative report on how the euro was saved from possible destruction in 2011, when a Greek exit was still on the cards. According to the report, Schaeuble was at the time a proponent of a Grexit, so as to save the common currency from contagion and collapse.

Though he has denied the report as regards his own stance, Schaeuble is now apparently attempting to turn the tables, asserting that it was a Greek politician who fuelled the Grexit debate.

But at the same time the German foreign minister confirmed the foundation of the FT report, admitting that there had been planning in Berlin for a possible Greek departure from the eurozone.

That served to confirm the Greek government's contention that the threat of eurozone expulsion was real, whereas Tsipras and his party have maintained that a possible Grexit was a bluff all along, as the eurozone would collapse if a member-state were to leave it.

Though some Syriza MPs from the party's left platform have argued that a Grexit should be considered, Tsipras himself and his party officially have never maintained that Greece should leave the eurozone, though he has said the country cannot remain in the euro at any cost whatsoever.

Indeed some in the party have disagreed with Tsipras' unswerving dedication to keeping Greece in the eurozone

The German foreign minister suggested that it was George Papandreou's October 2011 call for a referendum on the bailout package that forced Germany to hammer out a possible Grexit strategy.

"And then there was in Greece a government plan for a referendum: whether to exit or not. Do you think that a democratic state with rule of law won't consider what it should do if something it doesn't want is to happen?" Schaeuble said, clearly dismissing that a Grexit was ever a German aim, per se.

In fact, however, Papandreou had never proposed a referendum on a Grexit, but rather on approving the terms of the loan bailout. It was German Chancellor Angela Merkel and then French president Nicolas Sarkozy who delivered an ultimatum that if there was to be a referendum, it would have to be a yes or no on remaining in the eurozone, or else there should be no referendum at all.

That stark European dilemma led directly to the toppling of Papandreou in 2011.

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Eurozone
Germany
Alexis Tsipras
Wolfgang Schaeuble