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Economist warns: Grexit is not the answer

A top German economist has warned that if Greece leaves the euro single currency it will suffer a decade-long depression, urging European leaders to come to a compromise over a third financial aid programme.

Economist warns: Grexit is not the answer
People queue for cash at an Athens bank on Monday. Photo: DPA

“We can't allow ourselves the illusion that Germany can live better if the negotiations fail,” Marcel Fratzscher, president of the German Institute of Economic Research (DIW) told dpa in Berlin.

“Greece would rely on European help for years, and humanitarian aid too.”

The radical-left Syriza government has until the weekend to come up with sweeping reform proposals for the Greek economy to satisfy the country's creditors, the European Commission, International Monetary Fund (IMF) and European Central Bank (ECB).

Prime Minister Alexis Tsipras promised to have his proposals ready and on his opposite numbers' desks by Thursday, in advance of a meeting of eurozone finance ministers on Saturday and all 28 EU heads of government on Sunday.

“Perversely, a third [financial aid] programme has become indispensable because of the Greek negotiating strategy,” Fratzscher said. “The Greek government has run the economy into a wall.”

Fratzscher added that “German taxpayers would have to write off much more money” if Greece were plunged into a five- to ten-year depression after leaving the single currency.

Neither would a return to Greece's former currency, the drachma, help them out of the crisis.

“This is economic nonsense. We Germans know all too well that you can't create prosperity with a soft currency,” Fratzscher said.

Ultimately it would be down to Greek leaders to completely overhaul their country's economy, as its problems are not simply down to the strong euro making its products too expensive for export markets.

“The institutions in Greece don't work the way that's necessary for a market economy,” Fratzscher warned, pointing to corruption, poor tax administration, complex regulations and poor defences against monopolies.

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FOOTBALL

‘I’m fine — under the circumstances’: Collapsed Danish striker tweets from hospital

Christian Eriksen, the Danish football player who collapsed on the pitch in his country's opening Euro 2020 game, said that he was doing "fine" in an Instagram post from hospital on Tuesday.

'I’m fine — under the circumstances': Collapsed Danish striker tweets from hospital
Danish striker Christian Eriksen tweeted a picture of himself in hospital. Photo: DBU

“I’m fine — under the circumstances, I still have to go through some examinations at the hospital, but I feel okay,” he wrote in a post accompanying a photo of him smiling and giving a thumbs-up while lying in bed.

In a scene that shocked the sporting world and beyond, the 29-year-old Inter Milan midfielder suddenly collapsed on the field in the 43rd minute of Denmark’s Group B game on Saturday against Finland in Copenhagen.

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Medical personnel administered CPR as he lay motionless on the field for about 15 minutes before being carried off the pitch and rushed to hospital. He was later confirmed to have suffered cardiac arrest.

“Big thanks for your sweet and amazing greetings and messages from all around the world. It means a lot to me and my family,” he wrote in Tuesday’s post. “Now, I will cheer on the boys on the Denmark team in the next matches. Play for all of Denmark.”

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