Stick To Austerity Or Else: EU Ministers Threaten Greece With Euro Exit

By Oliver Tree | May 09 2012 1:14 PM

Germany's finance minister called Greece's membership in the euro into question on Wednesday, leading a chorus of European finance leaders expressing doubt on Athens' survival in the 17-nation currency bloc as it struggles to form a government.

REUTERS

Germany's Finance Minister Wolfgang Schaeuble talks to the media as he arrives at an European Union finance ministers meeting in Brussels January 24, 2012.

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Wolfgang Schaeuble said euro members cannot force Greece to remain in the common currency area, adding it is up to Greek citizens to decide whether to stay or not.

The comment comes as Greece struggles to form a coalition government after Sunday's elections returned a fragmented parliament. Surging anti-austerity parties are threatening to abandon the German-led Fiskalpakt that has so far kept the country financially solvent thanks to international aid, but at the price of deep cuts in the government budget.

If Greece decides not to stay in the euro zone, we cannot force Greece, Schaeuble said at a conference sponsored by German broadcaster WDR in Brussels on Wednesday.

They will decide whether to stay in the euro zone or not.

His comments came as European Central Bank executive Joerg Asmussen piled on the pressure for the divided Greek parliament to stick to the painful austerity program of public-service worker layoffs, tax hikes and service cuts.

Greece must be clear that it agreed to this rehabilitation program. There is no alternative, if it wants to remain a member of the euro area, Asmussen told the German business newspaper Handelsblatt on Wednesday.

In Athens, leftist Alexis Tsipras continued struggling to form a government on Wednesday, after first-place New Democracy party leader Antonis Samaras abandoned attempts on Monday.

Tsipras' party, Syriza, came second in elections which saw none of the seven parties that won seats in parliament capture more than 19 percent of the vote.

He has called for the scrapping of strict budget-cutting laws forced on Greece by international lenders in exchange for €320 billion in bailout loans.

But the radical leader faces a severe challenge to form a coalition around his agenda, as mainstream socialists PASOK and the ecologist Greens have already rejected his proposals.

Tsipras has until Thursday to form a government or concede defeat. If no coalition can be formed by May 17, Greece will have to call a fresh round of elections.