EU's Oettinger says Greece likely to issue IOUs to pay salaries, could pave way to Grexit

BERLIN: Germany's EU commissioner told German newspaper Bild that the Greek government would probably have to start issuing IOUs to pay wages and pensions and settle outstanding accounts, and that would render Greece unsuitable to remain in the currency union.

Greece has not, however, started to issue IOUs for these purposes and it has not been declared insolvent.

"An insolvent country that introduces a parallel currency does not fit into the euro zone," the commissioner, Guenther Oettinger, said in an interview due to be published on Tuesday.

"We have a curious situation whereby Greece is a member of the euro zone but it hardly has any euros at the moment," he said.

Oettinger said it made no sense to hold fresh talks with Greece if Athens continued to reject reforms.

Oettinger said EU funds would not be used to finance Greece's budget.- Reuters