In the cold light of the day Grexit seems a bad option

(Reuters,, +) –German Foreign Minister Frank-Walter Steinmeier said everything must be done to keep Greece in the eurozone.

“Don’t underestimate what it would mean for Europe if we don’t manage that,” he told a Social Democratic party congress, adding, “My fear is that we would no longer be taken seriously on many issues.”

On Friday, the euroworking group of state secretaries for finance discussed emergency scenarios for Greece during a closed-door meeting in Bratislava, according sources.

Their discussions touched upon options including capital controls, sources said on condition of anonymity. Such controls, typically deployed to prevent mass money transfers out of a country, could only be ordered by Athens.

Until now, Eurozone finance ministers have not  officially discussed scenarios other than a financial rescue for Greece.

The German minister’s statement comes on the back of an interview by  the vice president of Germany’s Bundesbank in a newspaper interview published on Saturday.

The vice-president of Germany’s Bundesbank said, however, that the full extent of the fallout of a Greek departure was not certain.

“The direct contagion effect on other countries is smaller because the direct claims of banks on Greece are smaller, but no one knows what the indirect effects would be,” Claudia Buch told the Rheinische Post newspaper. “But no one knows what the indirect effects would be.”

The European Central Bank chief economist, Peter Praet, said on Saturday that the bank’s governing council wanted Greece to remain in the eurozone.

Fears that a “Grexit” would cause chaos in European markets have subsided in recent months and officials believe it would not cause lasting damage to the euro.

Chancellor Merkel and German finance minister Schaeuble have kept unusually quiet since the abrupt departure of the IMF from the negotiating table, as have Juncker and Draghi, while it was left to Jeroen Dijsselbloem to announce on Saturday that there is no deal possible without the participation of the IMF.