There has been much discussion and speculation about Greece dropping the euro. But the better question may be, does Europe want to drop Greece from the Eurozone?
According to a member of the Greek negotiating team, who was interviewed in English by French publication Mediapart on condition of anonymity, Europe’s most powerful government wants Greece to exit:
“You cannot argue too much with Schäuble. It would be dangerous, because you won’t get finance, German banks will want their money back, and so on. So it’s an institution where you cannot make your voice heard, so what’s the point in encountering [them]?
“Schäuble has said “How much money do you want [in order] to leave the euro?” He doesn’t want Greece in the euro at all. He was the first to raise the issue of a Grexit back in 2011.”
However, the broader context of Schäuble’s question was not provided, so it is not known whether he was being facetious or serious.
Greece’s negotiations with its European creditors just before the referendum apparently turned menacing.
The source said all loans Greece received from the EU went to service the country’s debt, in other words, right back to the creditors. The bailout did not provide capital for Greek banks.
“We didn’t get any finance in order to pay them, we couldn’t borrow short-term and we couldn’t facilitate the liquidity of the economy because the ECB was putting one restriction after the other. So you have the liquidity problem and at the same time you have a financing problem. The two of them are connected in what I called from the beginning ‘credit asphyxiation’.
“In the middle of March, finally, some Brussels sources said to the correspondents in Brussels that “yes, the institutions – the EBD, IMF, European Commission, are using credit asphyxiation in order to force the government to comply, accept the reforms, do it quickly, etc.
“…at any moment, gradually, there comes a time you die. You can’t survive this much longer. [Greek finance minister Yanis] Varoufakis has even called it ‘waterboarding’, financial and fiscal waterboarding.
“For me it was an admission that they were using the worst kind of economic blackmail to the country. The worst kind of economic sanctions.”
The entire interview can be read here.