German industry pans Greek vote

Ulrich Grillo, the president of BDI, an influential association of major German industrial companies, had harsh words for the Greek people and their elected government in an interview with "Bild" newspaper on Monday morning. Commenting on the outcome of Sunday's referendum in Greece, Grillo called the result "a slap in the face of all Europeans."

Greek voters decided with a majority of 61 percent to reject the package of policy measures offered a week and a half ago by Greece's official creditors - which are mostly composed of other member countries of the eurozone, plus the European Central Bank (ECB) and the International Monetary Fund (IMF) - in exchange for their willingness to continue to provide the funds to roll over Greece's sovereign debt as payments come due.

The policy measures would have included some wage and pension reductions and tax increases, coupled with a proposed debt repayment schedule, that the current Greek government views as too harsh, saying such measures would further increase unemployment and worsen the country's economic depression by bleeding it of purchasing power and reducing overall economic demand.

The leftist government staged the referendum in order to give it a stronger hand in negotiating with its creditors.

Greece's creditors, however, take the position that Greece has no choice but to submit to further cutbacks in order to increase the competitiveness of its products on international markets, and meet its obligations to its creditors.

Risks of a return to the Drachma

"The Greek people has manoeuvred itself into a very difficult position, and the government in Athens is responsible for that," Grillo said. Accusing the government of having behaved irresponsibly, he said that the referendum result "makes the future even more uncertain for the Greek people."

Grillo warned that a Grexit - a Greek exit from the eurozone - could result in the aftermath of the referendum, and that "Europe's patience continues to be tested to an extreme degree." The lobbyist suggested that it wouldn't be possible to keep Greece in the eurozone "at any and every price."

Grillo said that an exit from the euro and a re-introduction of a sovereign Greek national currency would have severe consequences for the Greek economy.

"If a customer in Athens ends up having to pay for imports using a softer currency, imports would suddenly become very expensive. For example, food, medicine and energy. All Greeks would face a time of real hardship," he said.

nz/ng (AFP, Reuters)