Clegg warns of ‘irrevocable’ damage if Greeks quit euro

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A Greek withdrawal from the euro would cause “unpredictable, irrevocable damage” to the single currency that “no rational person” should advocate, Nick Clegg warned last night.

In a speech in Berlin, the Deputy Prime Minister criticised the suggestion “being whispered behind cupped hands” that Greece’s exit could be a good thing for the rest of Europe.

Instead, he called for Europe to show leadership to find a way out of the crisis and address the problems arising from the lack of fiscal coherence in the eurozone.

His comments echoed those of Prime Minister David Cameron who urged his fellow EU leaders to find a “lasting solution” to the eurozone crisis at the end of the latest of 18 summits on the issue in the early hours Wednesday.

Mr Clegg, who travelled to Germany with Business Secretary Vince Cable, said: “We have got to hit back against this fatalism which says that Europe can’t fix this.

“And by the way, let me challenge the fashionable assumption being whispered behind cupped hands – that for some countries, leaving the euro wouldn’t be that bad, that actually a Greek exit now would be in everyone’s best interests.

“My own view is that that wildly underestimates the unpredictable, irrevocable damage that could be done to a monetary union when it is shown not to be permanent.

“No rational person interested in the wealth and wellbeing of Europe’s citizens could advocate taking such a risk: not with Greece’s future, or our own.”

Mr Clegg said the faultline running through the common monetary policy was its lack of “shared fiscal arrangements”. “You cannot have a monetary union in which one country saves, exports and invests and another spends, borrows and consumes without some mechanism to make it all add up,” he added.

At the end of the Brussels summit on Wednesday, Mr Cameron voiced his frustration to fellow EU leaders, arguing for a once-and-for-all sweeping change of policy priorities to deliver growth across Europe – but without giving up on tough austerity measures.