German central bank calls for suspension of financial support to Greece
25 May 2012
Pressure on Greece has increased considerably after Germany's central bank called for a suspension of financial support to Athens, with eurozone finance ministries agreeing to draft contingency plans for a Greek exit from the euro.
The Budesbank delivering a grim warning to Athens said, a Greek withdrawal from the eurozone would be disruptive but ''manageable'', countering claims by Greece's radical anti-austerity leader, Alexis Tsipras, that Europe would not dare to pull the plug.
''When the euro system provided Greece with large amounts of liquidity, it trusted that the programs would be implemented and thereby ultimately assumed considerable risks,'' it said. ''In the light of the current situation, it should not significantly increase these risks.''
According to the German financial daily Handelsblatt, the Bundesbank was ''holding a gun to Greece's head'', which is seen as a blunt message that Germany would not succumb to populist political rhetoric from Athens.
Berlin has also leaked the news of its member on the European Central Bank board, Joerg Asmussen, would be heading an ECB taskforce to handle the Greek crisis.
European leaders, though, continue to express determination to keep Greece in the eurozone after their meeting in Brussels. They said even though a deep divide existed between France and Germany, they would seek a new EU ''growth pact'' designed to stimulate their sagging economies.
