German MP says Berlin should help Greece leave euro

Germany should constructively support any efforts by Greece to abandon the euro and return to the drachma, a leading MP in Germany's junior coalition Free Democrats (FDP) said on Saturday.

"If Greece wants to leave the euro zone, that is its own autonomous decision," Frank Schaeffler, an FDP member in the finance committee of the Bundestag, told Reuters.

"And Germany should accompany them constructively."

Greek Prime Minister George Papandreou earlier on Saturday denied there was even unofficial discussion over Greece quitting the euro zone and asked that his troubled country be "left alone to finish its task.

On Friday, influential German weekly Der Spiegel reported talks were held to discuss the possibility, raised by Athens, of Greece withdrawing from the 17-member euro zone, as well as the idea of restructuring Greece's 327 billion euro ($470 billion) sovereign debt.

Schaeffler agreed that bringing back the drachma would spook markets and cause problems for the entire euro zone, but only for the short term.

"I believe, however, that we could cope with these problems in the end."

Schaeffler recently gathered a dozen of the party's Bundestag MPs around him to pressure Chancellor Angela Merkel's CDU-FDP cabinet into taking a harder stance against euro zone bailouts in an early sign of internal opposition that has since gained support.

Many Free Democrats share the views of economists that Greece's debt trajectory is unsustainable and action needs to be taken sooner rather than later before the long-term cost becomes far greater.

Senior FDP official Hermann Otto Solms, a vice-president of the Bundestag and an economy committee member in parliament, said German taxpayers should no longer be held liable for the obligations of other euro zone allies.

"(If Athens cannot meet its redemptions), then Greece has to restructure its debt," Solms told Reuters at a media event in Hamburg on Friday.

The laissez-faire FDP, whose core electorate tends to be higher paid professionals, has been the most vocal party within Germany to openly question putting taxpayers on the hook for countries that have long refused to implement economic reforms.

The Free Democrats are in the midst of a power vacuum after a series of elector drubbings cost its unpopular chairman his position, and one faction within the party wants a clear commitment to the euro zone including declaring the FDP "the party for Europe.

[Source: By Christiaan Hetzner and Gernot Heller, Reuters, Berlin, 07May11]

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