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Berlin: Secret plan for Greek default within the euro

Most, if not all, European countries and the relevant financial institutions have two unspoken fears. One leads to the other.


First, they are making plans for a possible Grexit and secondly, they do not disclose such plans in order to not cause turmoil.

At the same time, an article in the German newspaper Die Zeit 'The German government is preparing a Greek bankruptcy plan without the country's exit from the euro," has caused a sensation, but a spokesman for chancellor Merkel during the regular briefing of journalists declined to comment.

The newspaper cites sources in the government, according to which there is a growing sense in Berlin that Athens will not be able to implement some of its obligations to lenders in the coming critical weeks. Under the plan cited by the newspaper, it will allow the European Central Bank to continue to support Greek banks, although it considered these bankrupt.

A prerequisite for this scenario of mild bankruptcy to happen is for the government to show willingness and perseverance on the path to reform.

Meanwhile, EuroInsight magazine is also "waiting" for a Grexit. EuroInsight, cites Eurozone officials conveying the mood of European capitals. Specifically it mentions that the governments of the Eurozone and the institutions have studied the possible effects of a Greek exit and their mitigation. At the same time, for obvious reasons, tthey are rying to downplay the importance of such exercises on paper.

Fleming Larsen, former deputy director of the IMF research department, says: "At this point you should be very, very concerned about the possibility of a Grexit.” Furthermore, he stressed that it is very likely that the IMF has created a very small and quite secretive group of senior managers that will have a major concern to discuss the possibility of a Greek exit from the euro or possible default of its obligations and at the same time to consider limiting possible implications of such a scenario for the global economy. However, when the issue was raised in the representative of the European component of the IMF, Angela Gaviria, declined to comment.