Continuing the exploration of the book De Eurocrisis by Jeroen Dijsselbloem (soon to be available in Greek) in which the Chair of the Eurogroup recounts the high-risk negotiations that kept Greece into the fold of the euro – along with much other Euro-area material, indeed – one cannot but stop awhile at the scenes where Grexit came to be an effective possibility.
“If the Greeks were not disposed to carry on several further reforms, then there should be fast consultations for a temporary exit of the country from the euro – for a duration of at least five years. So, the notion of a Grexit, that until then nobody had mentioned in international political fora, was put on the table with a bang […] It was clear that [Wolfgang] Schaeuble spoke in earnest. He put a noose around the neck of the Greeks because support to the euro was still quite strong in Greece”.
Another contribution of J. Dijsselbloem to the efforts that were expended so as to find a way out of the deadlock in summer 2015 with a new (third) Adjustment Programme, assorted with further guarantees to Greece’s creditors in the form of a Fund where public-sector assets would be assigned as a security to the bail-out funds agreed by the creditors:
“We had adjusted the proposal of Schaeuble that the Privatisation Fund and its administration be taken out of the hands of Greece, stating that the Fund would be “under the supervision of the European institutions”. That is, of the European Commission. So the humiliation of having to transfer Greek assets to a foreign Fund had been removed. One further element of contention remained […]. Tsipras wanted the income accruing out of Greek assets to be invested in Greece, Merkel demanded that any income be allocated to debt repayment […]. I proposed that for every euro, 20 p.c. be turned back to Greece. Gabriel gave the idea to Merkel, Rutte sent it by SMS to Tusk. So we were going the right direction – but now Merkel blocked us”.
This is how Greece was kept in the euro area, this is how Grexit was avoided. A fascinating narrative.