Ex French FinMin Baroin Examined Impact of Greek Euro Exit in 2011

Posted by in Economy

 Francois Baroin, the former French finance minister, examined the possibility of a Greek exit from the euro zone with his advisors, according to advance extracts published Tuesday on the website of French magazine L’ Express from his forthcoming book on his experiences during the debt crisis.

“It was a discussion without documentation, without any trace. Everyone knew that the subject of the meeting alone, if it was known, could have had disastrous consequences,” Mr. Baroin says, “The non-official meeting was only about working hypotheses. It would have been reckless not to imagine the possibility, and madness to talk about it.”

Mr. Baroin asked three advisors in November 2011 to examine two hypotheses: the potential cost of a Greek exit for the financial sector and the cost of a complete explosion of the euro zone.

The meeting with advisors described by Mr. Baroin came after former Greek Prime Minister George Papandreou proposed a referendum on whether Greece would take a bailout package, and ultimately its future in the currency bloc.

Mr. Baroin writes that a Greek exit and contagion to other members would “de facto” have led to France exiting the euro. (dowjones via capital.gr)

Francois Baroin writes also in his book about the dramatic meeting in Cannes, when he was then Prieme Minister George Papandreou to formally collapse (psychologically), when German Chancellor Angela Merkel and President Nicholas Sarkozy threatened him to forget about a bailout and financial aid, if he would proceed to a referendum (in.gr)