The Greek crisis has been going on for so long now, it is hard to imagine it actually coming to a conclusion. But next week’s meeting of European Finance Ministers is one of the last chances for a deal to be struck. However, there is no sign of an agreement yet. The Financial Times today picks up on German press reports about the German government preparing for Greece leaving the Euro.
The Germans have long been convinced that any contagion from Greece leaving the single currency could be contained privately many in Whitehall think that Berlin is far too complacent about this. Now, it appears that Merkel is turning her attention to how Greece could be kept inside the EU if it was, effectively, kicked out of the single currency. The FT says that the Germans are considering emergency EU funding for Athens in these circumstances.
A Greek exit from the single currency would have profound effects for Europe. It would also dramatically alter the British EU renegotiation. Initially, the fallout from Grexit would leave little time to address any other issue. But, in the medium term, it would force fundamental changes to how both the EU and the single currency works, making it possible for Britain to have a far more comprehensive renegotiation. It would also increase Cameron’s diplomatic leverage for after a Grexit, a British exit from the European Union would send a disastrous message about the state of Europe.