Exclusive: Daimler CEO casts doubt on Greek euro membership

Fri Nov 11, 2011 10:42am EST
 
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By Hendrik Sackmann and Christiaan Hetzner

FRANKFURT (Reuters) - Automotive giant Daimler, a leading German exporter, is against keeping Greece in the euro zone at all costs and believes Europe's single currency will survive even if Athens is forced to return to the drachma.

"It depends on how you define the word, but I wouldn't consider one link splitting off from the rest as a 'break-up' of the euro zone," Chief Executive Dieter Zetsche told Reuters in an interview at the company's headquarters in Stuttgart.

"Creating one bailout fund after the other won't help if Greece economically cannot return to the level of the rest of Europe over the next 10 to 20 years."

Zetsche's comments implying Greece is unfit to remain in the euro zone are the first from a major German exporter.

The sovereign debt crisis first triggered by Athens nearly two years ago threatens to engulf Italy, with roughly 1.84 trillion euros ($2.5 trillion) the fourth largest bond issuer in the world, and yield spreads suggest it now even risks spreading to France.

Daimler's CEO argued that Italy's comparatively low level of corporate and household debt can only partially offset the immense burden of the state's financial obligations, which amount to about 120 percent of its economic output.

"The important thing is that a political leadership can emerge that is capable of instituting structural reforms that can lead to more dynamic growth rates," he said.

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