Article by ForexTime
The euro came under pressure at the start of trading on Monday in reaction to a report in the German media on Sunday that showed German Chancellor Angela Merkel would be ok to let Greece exit the Eurozone in the event a far-left Greek party wins the upcoming elections in Greece. A snap election has now been called for January 25. The Syriza party is currently ahead in opinion polls and it is feared this party want to abandon austerity measures imposed by the troika.
Der Spiegel news weekly quoted government sources as saying Berlin sees a Greek exit from the Eurozone as “almost inevitable” should the radical leftist Syriza party win the vote. Greece’s parliament was dissolved Wednesday after the assembly failed to agree on a successor to outgoing President Karolos Papoulias in three successive votes.
Both Merkel and her finance minister Wolfgang Schaeuble had come to consider that Greece’s departure from the single-currency bloc would be “manageable”, the magazine said.
The recovery underway in other formerly problem economies such as Ireland and Portugal, the establishment of a permanent Eurozone bailout fund and the creation of a banking union had all bolstered Berlin’s belief that the contagion from a fresh Greek crisis would be limited, it added.
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