Grexit would be 'start of the end for the eurozone,' says Tsipras

Greek PM Alexis Tsipras has warned in an interview of the costs to EU taxpayers if his country left the eurozone. Athens has meanwhile finally submitted a promised reform plan to its creditors.

http://www.dw.de/grexit-would-be-start-of-the-end-for-the-eurozone-says-tsipras/a-18504543

In the interview in the Tuesday edition of Italy's Corriere della Sera, Tsipras said that if Greece were forced out of the eurozone after failing to make a deal on managing its debt, Spain or Italy could soon follow, precipitating the collapse of the currency bloc.

"It would be the start of the end for the eurozone," Tsipras said.

"If Europe's political leadership cannot handle a problem like Greece, which represents 2 percent of its economy, how will the markets react to countries that are facing much bigger problems, like Spain or Italy that has a 2 trillion euro public debt?" he said.

"If Greece goes bankrupt, the markets will immediately look for the next victim. If negotiations fail, the cost for European taxpayers will be enormous," he warned.

'Austerity has failed'

Tsipras also reiterated comments made in the past few days in which he rejected demands by Greece's international creditors to cut pensions and other social spending in return for access to the last tranche of a multibillion-euro bailout.

But he said Greece could reach a deal if these demands for austerity were dropped.

"Europe and international institutions must recognize that austerity has failed," he said.

Tsipras and his Syriza party rode to power in recent elections on promises to end austerity measures imposed by previous governments to fulfil creditors' demands.

His comments come as German Chancellor Angela Merkel and European Central Bank officials warned that time was rapidly running out to reach a deal, with Athens needing to reach agreement on unlocking the final 7.2 billion euros ($8 billion) of its bailout package to be able to repay 1.6 billion euros owed to the International Monetary Fund by June 30.

Counterproposal submitted

Tsipras is due to meet Merkel and French President Francois Hollande on Wednesday in another attempt to break a stalemate that has seen the Greek prime minister label as "absurd" an EU proposal last week calling for pension cuts in return for a debt deal.

Athens finally on Tuesday submitted a promised list of economic reforms to its EU-IMF creditors in response to the EU plan, according to an EU source.

The submission comes two days after European Commission President Jean-Claude Juncker complained that Tsipras had not fulfilled a pledge made at a meeting last week.

The months-long standoff between Athens and its creditors has fueled increasing speculation that Greece could be forced out of the eurozone, though both sides say they want to see the country remain in the common currency.

tj/bw (AFP, dpa, Reuters)