‘Grexit’ Could Rip Billions Out Of German Budget Warns Bank Chief

BERLIN, July 5 (Reuters) – Bundesbank chief Jens Weidmann has warned Angela Merkel’s cabinet that a Greek exit from the euro zone would rip billions of euros out of the German budget, German business daily Handelsblatt reported on Sunday, citing government sources.

The paper said that Weidmann [pictured above at a weekly cabinet meeting at the Chancellery in Berlin] had warned that the costs of a Grexit would hit Bundesbank profits, which flow into the budget.

It added that Bundesbank losses would be greater than the 14.4 billion euros ($16 billion) already put aside in provisions linked to the euro zone debt crisis because it would make losses on Greek securities bought by the central bank.

“This would not be enough in the case of a Grexit,” Handelsblatt reported without specifying its source.

A Bundesbank spokesman declined to comment, as did a spokesman for the German government and for the finance ministry.