London mayor calls on Greece to exit euro

20th June 2011, Comments 0 comments

Greece should abandon the euro in an effort to mount a recovery of its indebted economy, London mayor Boris Johnson said on Monday.

Writing in The Daily Telegraph newspaper, Johnson said Greece would do better to forge a "new economic identity with a new drachma." The drachma was Greece's currency before it entered the eurozone.

"For years, European governments have been saying that it would be insane and inconceivable for a country to leave the euro. But this... option is now all but inevitable, and the sooner it happens the better," said Johnson.

He added that Greece would be in a position to enjoy lower interest rates and an export-led recovery should it abandon the European single currency.

His comments come a day after Britain insisted it was not planning any financial help for Greece beyond its contributions through the International Monetary Fund.

Danny Alexander, chief secretary to the Treasury, said that "there's simply no proposition on the table for the UK to contribute beyond that IMF involvement and I don't expect there to be one."

Britain is not part of the 17-nation eurozone but it offered a bilateral loan to its neighbour and eurozone-member Ireland when it was bailed out last year.

Eurozone ministers on Sunday decided that blocked loans due to bankruptcy-threatened Greece under last year's international bailout should be freed up by "mid-July."

Athens will now receive the disputed 12-billion-euro ($17-billion) fifth instalment once the Greek parliament passes a new austerity package.

© 2011 AFP

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