German industry starts to advocate Greek exit from euro zone

German industry is beginning to call for Greece to quit the euro zone, having already pared back what business it had there, and now fearing that a continuation of the crisis could spoil a nascent recovery in the rest of Europe.

"A Greek exit from the euro zone can no longer be taboo," said Matthias Wissmann, president of the powerful German automotive industry association VDA.

“It could - if combined with a wise future strategy from the euro countries - even contribute to the stabilisation of the euro zone ... The markets need dependability,” said Wissmann, also vice-president of the German industry umbrella organisation BDI.

The glimmer of a divergent view by a group that generally sticks close to government policy coincides with a growing sense that even Chancellor Angela Merkel may not be able to keep Greece in the euro zone, despite new proposals following Greece's default on a loan from the IMF on Tuesday.

A snap referendum to be held next Sunday on the conditions demanded by Greece’s lenders in return for more cash is seen by most European officials as tantamount to a vote on whether or not to quit the euro zone.

Die Familienunternehmer, which represents the 180,000 family-owned businesses who are the backbone of Germany’s export-led economy, said the latest developments vindicated its opposition to the European Union’s bailouts for Greece.

“Our collective efforts must now be applied to an orderly exit of Greece from the euro,” it said. “The way the euro is handled has an effect on German companies and how they do business,” its chief economist Daniel Mitrenga said.

“We never favoured the ‘domino thesis’ that all these other countries would collapse if there was a Grexit.”

The shift in attitude partly reflects the fact that German companies have sharply reduced their Greek exposure in recent years.

Total German exports to Greece were just €5 billion last year, accounting for less than half a per cent of total German exports, and Greece slid to 38th from 34th in the ranking of Germany’s export partners.

Reuters