Eurozone politicians at odds over break-up

By Rachel Cooper

European politicians were at odds over the future of the beleagured single currency on Friday, after warnings that Finland was preparing for a full-blown currency crisis.

Erkki Tuomioja, Finland’s veteran foreign minister, cautioned "we have to face openly the possibility of a euro-break up". He added that "it is not something that anybody — even the True Finns [eurosceptic party] — are advocating in Finland, let alone the government. But we have to be prepared."

Other European politicians have been taking a hard line on the future of the euro, with Austria's deputy chancellor, Michael Spindelegger, arguing earlier this week that there should be a mechanism to expel members who violate the rules of the currency union.

Michael Fuchs, deputy parliamentary leader of Angela Merkel's Christian Democratic Union party, said on Friday that Greece must stick to its commitments if it expects to receive the next instalment of financial aid. He added that German banks could handle a Greek exit from the eurozone.

"A theoretical exit for Greece would be manageable," he said, adding that "the exposure at this stage is about €17bn if I'm not mistaken", virtually all of it in the public sector.

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But other eurozone politicians leapt to the defence of the single currency on Friday, with Finland's European affairs minister saying the country is "100pc committed" to the euro.

"The foreign minister's speculation does not reflect the government's position," Alexander Stubb told Reuters. "We see [the euro] as an economic and political project to which we are 100pc committed."

Mr Stubb said Finland would help other euro member states in financial trouble but would demand tighter budgetary discipline in exchange.

"Finland is committed to finding solutions for the future of the euro. We will have to have increased conditionality and deeper integration. We need to have tighter rules," he said.

Holland's finance minister, also backed the euro. He said that the focus of the Netherlands and the eurozone was to keep the single currency together.

"We never speculate about an exit from, or the break-up of the euro zone," said Jan Kees de Jager. "The euro zone is very important for the Netherlands. We've benefited a lot from Europe and the single market."

Austria's chancellor rebutted comments by his deputy, saying that the the break-up of the euro area or the bankruptcy of a member would do more harm than good and he cannot support expelling a country.

"The negative consequences of a eurozone breakup would by far exceed possible benefits it could have for individual countries," said Werner Faymann. "A sovereign bankruptcy of a euro member would have incalculable consequences for all of Europe, including Austria, and is hence not in our interest."

While politicians were at odds over the future of the currency bloc, the European Commission said it regarded the euro as "irreversible".

“The commission is not working on the split of the euro area, nor contingency plan, nor grexit, or any plan” that would involve a country leaving the euro area, a spokesman said,