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BERLIN, July 29 (Reuters) – A Greek exit from the euro zone
would cause “utter chaos” but would have to be accepted if
Athens was not willing to implement reforms, Chancellor Angela
Merkel’s Bavarian ally Horst Seehofer told German newspaper Die
Welt on Wednesday.

“No one can predict the consequences of a Grexit other than
that a lot of Greece’s debts would have to be written off and at
the same time monetary help would be necessary,” Seehofer, state
premier of Bavaria, said to the paper.

“On top of that there would be utter chaos. If Greece were
not prepared to reform, a path like that would have to be
accepted but one shouldn’t strive for it oneself or organise
it.”

Seehofer’s Christian Social Union (CSU) has taken a tougher
stance on Greece than Merkel’s party. Some CSU members have been
among the most vocal in calling for Greece to leave the euro
zone, with Bavarian finance minister Markus Soeder pleading last
month for an “orderly” Grexit.

Seehofer said he shared Merkel’s view that a debt haircut
for Greece should not be considered but that debt relief
measures were “responsible”.

Asked about Finance Minister Wolfgang Schaeuble’s proposal
that Greece could take a five-year “time-out” from the euro
zone, Seehofer said he did not consider this to be an option.

Earlier this month German lawmakers gave the euro zone the
green light to negotiate a third bailout for Greece, but there
was a sizeable conservative rebellion.

Asked if the third bailout for Greece would be the last one,
Seehofer said: “If what has now been decided works and is done,
we have the problems under control.”

He said Merkel would continue to have his full support as
long as she continued to call for reforms in return for
solidarity.

(Reporting by Michelle Martin; Editing by Louise Ireland/Hugh
Lawson)