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Eurozone members told to prepare for Greek exit

Updated at 9:36 pm on 24 May 2012

Eurozone officials have told member countries to prepare contingency plans in case Greece decides to quit the bloc.

Three officials told the Reuters news agency that the instruction was agreed on earlier this week by a teleconference of the Eurogroup Working Group.

One said the working group had agreed that each eurozone country should prepare a contingency plan, individually, for the potential consequences of a Greek exit.

The BBC also reports former Greek Prime Minister Lucas Papademos has been quoted as saying that the Greek government may be making preparations for leaving the euro.

It cannot be excluded that preparations are being made to contain the potential consequences of a Greek euro exit, he said in an interview with Dow Jones Newswires.

The risk of Greece leaving the euro is real and it depends effectively on whether the Greek people will support the continued implementation of the economic programme, he said.

Markets in Italy and Spain closed down 3.7% and 3.3% respectively. London, Paris and Frankfurt fell more than 2%.

The euro fell to its lowest point against the dollar since August 2010, down more than 1.5 cents on Wednesday to $US1.2571.

Germany's central bank said on Wednesday the developments in Greece were highly alarming. In its latest monthly report, the Bundesbank said: ''Greece is threatening not to implement the agreed reforms and consolidation measures.''

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