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France calls Germany’s Grexit proposal ‘unrealistic’

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
French Finance Minister Michel Sapin (L) gestures as he speaks with German Finance Minister Wolfgang Schäuble during a meeting of the Eurogroup finance ministers in Brussels on July 12, 2015. (AFP)

French Finance Minister Michel Sapin has criticized his German counterpart Wolfgang Schäuble for proposing a temporary withdrawal from the euro for debt-laden Greece.

“I think Mr Schäuble is wrong and even contradicting his own deep European commitment,” the French minister said in an interview to be published Monday in the German business daily Handelsblatt, excerpts of which were released Sunday, AFP reported.

Allowing a country to temporarily leave the single currency bloc signifies that others can get out of trouble by readjustment of the euro, Sapin further said, adding that Schäuble wasnot realistic” in his remarks.

The French minister said difficulties should be resolved through structural reforms rather than manipulating the exchange rate.

“You don't overcome difficulties by manipulating the exchange rate but by structural reforms which reinforce competitiveness and lead to efforts at budget balancing,” Sapin added.

On July 16, Schäuble had said a temporary exit from the 19-nation euro region may be “the better way” for Greece since it would allow the debt forgiveness that is necessary for Athens' survival but banned under euro rules.

Last month, eurozone finance ministers reportedly included an option for a temporary Greek exit, the so-called “Grexit scenario”, from the euro if Athens failed to agree a bailout deal.

However, after lengthy negotiations, Greece and its creditors signed a general agreement on July 13 on a third bailout plan, worth 86 billion euros ($93.3 billion), providing Athens can implement a new round of eye-watering austerity measures heaped on a country already reeling from a six-year-long recession and a 25-percent-plus unemployment rate.

The deal for the third bailout is expected to be reached by August 20.

Greece recently received a short-term loan of 7.16 billion euros ($7.77 billion) from the European Union, which allowed the cash-strapped country to repay about two billion euros ($2.2 billion) of its debt to the International Monetary Fund (IMF).

Athens has received two bailout packages worth a total of 240 billion euros ($272 billion) over the past five years.

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