Talk of Greece leaving euro 'irresponsible'

COMMITTEE ON EU AFFAIRS:PEOPLE ARE "playing with fire" when they speculate about Greece leaving the euro, the Oireachtas Committee on European Union Affairs heard yesterday.

Minister of State for European Affairs Lucinda Creighton warned of the “very, very damaging” implications if Greece abandoned the euro.

Talking about Greece leaving the euro was effectively talking about the breaking up of the euro, she said.

This was “thoroughly irresponsible”, and she said she was disappointed the head of the International Monetary Fund had been involved in speculation about the exit of Greece from the euro.

Earlier this week the head of the IMF, Christine Lagarde, said leaving the euro was “not the most favourable solution” for Greece, but “officials must be prepared for all solutions”.

Ms Creighton said the euro zone must be a stable and durable monetary union, but if states began to opt in and opt out then the implications would be very damaging for the future of the euro and for individual states.

She was responding to Fine Gael TD Paschal Donohoe, who said people were playing with fire by speculating on Greece’s departure from the euro zone.

He said he was “gravely disappointed” that people were so severely underestimating the economic and political consequences if Greece left the euro.

Every effort should be made to help Greece remain in the euro zone, he said. “Anything less than that will unleash . . . consequences that we will rue for a long time to come.”

Earlier, Ms Creighton told the committee that she had “full confidence” in Minister for Agriculture Simon Coveney as he negotiated Common Agricultural Policy (Cap) reforms.

Concern has been expressed about Cap funding as some member states are advocating a reduction in the overall EU budget.

Spending on Cap represents 40 per cent of the total EU budget.

Ms Creighton said she told the general affairs council in Brussels last month that the European Commission’s proposals for Cap funding were “the minimum acceptable” to Ireland.

“We see a need for continued food security and safety, which warrants only gradual changes to the Cap.

“We also have an express national interest in defending our share of Cap payments.”

Ms Creighton said Ireland had some “influential allies” in its defence of Cap.

Fianna Fáil TD Timmy Dooley said the future of the Cap was not only a matter for farmers.

It was also important for consumers because of its role in food security, safety and quality, he said.