Financial News

Call to kick Greece out of the euro zone

Greece should be kicked out of the eurozone as quickly and as easily as possible, according to the next country planning to join the single currency.

A Greek exit from the eurozone would minimise “further damaging the currency bloc”, claims Latvian Finance Minister Andris Vilks .

Latvia hopes to join the eurozone in 2014.

“A way must be found to pull Greece out of the eurozone as soon as possible, with as little pain as possible. My personal opinion is the sooner the better,” said Vilks.

The Latvian economy is running at odds with other eurozone economies, like Greece, Spain and Italy.

A recent austerity drive has been to help it meet eurozone entry criteria, while countries already inside the bloc are failing to meet their obligations.

Latvia negotiated the international loan package and was praised by International Monetary Fund head Christine Lagarde as a model of recovery.

After GDP shrank 0.3% in 2010, Latvia delivered 5.5% growth last year.

Meanwhile, the European Commission has temporarily approved a bridging loan for four Greek banks – Alpha Bank, EFG Eurobank, Piraeus Bank and National Bank of Greece, to maintain their financial stability.

The commission has opened four investigations to examine whether the measure is in line with its rules on state aid for banks during the crisis.

Commission Vice President in charge of competition policy Joaquín Almunia said: “Greek banks are currently operating under extreme conditions. Their participation in the Greek Government bond exchange and the deep recession have weakened their capital. The bridge recapitalisation ensures the stability of the Greek banking system.”

In Berlin, the German finance ministry has welcomed Mario Draghi’s pledge to “do whatever it takes” to save the euro, but a spokesman would not be drawn on speculation Draghi was hinting at a resumption of a hotly contested European Central Bank programme of bond purchases, and underlined the need for countries in crisis to pursue reforms.

“Mr Draghi said the ECB would do everything to maintain the euro and the German government will do everything it can politically to maintain the euro,” said deputy government spokesman Georg Streiter.

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