German FinMin Schaeuble insists "Grexit" a better option

German Finance Minister Wolfgang Schaeuble said on Thursday that he still thought a temporary exit of Greece from the euro zone was a "better way" for the country as it would pave the path for a debt haircut which was necessary to save Greece from insolvency.

The comment came hours after Greek parliament approved a package of austerity measures in return for a new bailout up to 86 billion euros (about 94 billion U.S. dollars) from its international creditors.

Schaeuble told Deutschlandfunk radio on Thursday morning that he thought the approval was "an important step" after "difficult debates" in Greece.

He added, however, that a lot of economists increasingly doubted Greece could solve its problems without a debt haircut which was not possible if Greece remained in the euro zone.

"No one knows at the moment how they could go without a haircut, and everyone knows that a haircut is incompatible with a membership in the monetary union," Schaeuble said.

The minister first raised the controversial idea of a "timeout" of Greece last weekend when European leaders gathered at Brussels for 17-hour talks to hammer out solutions to the Greek debt crisis.

He suggested at that time that Greece could take a temporary exit from the euro zone, but remain in the European Union, for at least five years, during which period Greece could restructure its debt and receive further "growth-enhancing, humanitarian and technical assistance".

Speaking on the German radio on Thursday, Schaeuble said euro zone finance ministers would examine the Greek legislation to see whether required laws were implemented.

If that was the case, he would ask German parliament to grant a mandate in a special session on Friday to the German government to start formal negotiations with Greece on the new bailout program, the third one within five years. Endit