Greece will leave the Euro and the rest of the EU has to work out how to minimise the impact on financial markets, says Ken Clarke. The pro-European former Chancellor of the Exchequer made the claim on the BBC Sunday Politics programme yesterday.
Clarke was discussing the stand off between the new socialist Greek government and their German counterparts over austerity. Athens is insisting they be allowed to make good on their election pledge to end government cuts insisted on by Eurozone members as a condition of bailouts. But Berlin is also digging its heels in and demanding the Greeks maintain the current policy, despite the public having voted against it.
Mr Clarke said: “I can’t see how you can sensibly avoid the Greeks defaulting and the Greeks having to leave the eurozone.
“It’s not anything to do with just the Germans, I can’t see why any other states should take a huge multi-billion pound hit again for the Greeks so they can hire more civil servants, raise their minimum wage (and) scrap all their labour market laws.”
He added: “I hope a very great deal of work is going on to minimise the impact on financial markets, on the United Kingdom – because it affects us just as much anybody else in the western world.” The former Chancellor also called the new government in Athens “latter day Trotskyites”, whose demands could never be met.
Clarke’s comment is significant because he remains committed to bringing the UK into the Euro. In the past politicians who have been willing to raise the issue of Greece exit (known as Grexit) were Eurosceptics.