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Greece Must Exit the Eurozone to Regenerate and Become Competitive

Germany vote for Greek Bailout Package

Germany’s interior minister told daily newspaper Der Spiegel that Greece would benefit more from leaving the Eurozone then remaining enslaved to its harsh austerity measures: “Greece’s chances of regenerating and becoming competitive are definitely greater outside the Eurozone than in.” Hans-Peter Freidrich’s comments echo the sentiments of many around Europe who feel that Greece’s best interests lay outside of the single currency and its economic inequalities.

Freidrich’s dissident concerns are not anomalous within Merkel’s Christian Democratic Union (CDU) and a survey conducted yesterday found that 62% of Germans now oppose the Greek deal. Today the Bundestag will vote whether or not to pass the Greek bailout package; the deal is expected to go through despite mounting opposition from a myriad of standpoints.

Another member of CDU, Klaus-Peter Willsch told Reuters on Sunday that Germans are losing faith in the Greek aid narrative, he states: “Quite clearly the mood in Germany is turning against further rescues for Greece. This is all déjà-vu for the public. We’ve been promised all kinds of things that aren’t fulfilled and then a few months later there’s the need for another rescue package.” The bill needs 311 votes to pass, and Merkel’s coalition holds 330 seats in the Bundestag; if the rebellion takes the form of a larger than expected group the German Chancellor may have to rely on opposition votes to continue the Greek bailout package.

But Freidrich’s comments have been refuted by Guido Westerwelle, the German foreign minister: “Freidrich is one of the weaker ministers in the German government… and isn’t taken desperately seriously in Germany… I don’t understand the political speculation about a Greece outside the Eurozone.”

Today’s vote is the latest hurdle in the 3,000 m steeplechase towards the release of Greece’s second aid tranche to date. The Pound to Euro Exchange Rate has fallen over the last week from 1.20 to 1.18 amid a negative outlook from the BoE minutes report and progress in the Greek debt deal. If the vote goes through, the Euro should maintain its strong recent performance, but if the bill is not passed Greece’s inevitable default could weigh heavily on the single currency.