Eurozone countries are formulating plans to boot Greece out of the single currency, as expectations grow that Athens may default on its debts next month.
A memo put together by the Finnish Finance Ministry, a close Berlin ally, talks of “very difficult political decisions” as the currency bloc braces itself for Greece’s cash flow to ossify, according to The Times.
The document, leaked to Finnish paper Helsingin Sanomat, went further:
By tacit approval of the other Eurozone countries a process is started that in effect results in Greece being expelled from the euro.
There are several obstacles facing Greece. First its government must draw together a list of economic reforms, which must then be ratified by its EU creditors. Then it must legislate to lock in the agreed changes.
Athens also has debts to repay. It repaid a €450m (£326m) loan from the International Monetary Fund (IMF) yesterday, but has another, larger payment of €763m to pay on 12 May, and, unless it can secure the €7.2bn in funding from the EU by delivering reforms, is not expected to be able to pay up.
The reform process has dragged on causing the EU’s patience to wear thin, a thinning not helped by suggestions Greece is formulating its own contingency plan involving Moscow.
After meeting Vladimir Putin this week, Greek Prime Minister Alexis Tsipras said:
Only together with Russia are we able to build a new architecture of security in Europe.
These words are unlikely to gain favour in the Eurozone, and it is understood Russia is considering paying Athens in anticipation of future profits to be gained by exporting Russian gas to Europe via Greece.