Grexit: ‘Disaster’ for euro zone

25 juni 2015 – Tom DiChristopher, Web and TV producer at reports:
The economist (Buiter, red.) credited with coining the term “Grexit” said Thursday it would be a disaster if Greece leaves the euro zone.
Should Greek leaders and creditors fail to reach an agreement, Buiter said capital and deposit controls are likely to be enforced and Greece will default on its International Monetary Fund commitments. This would be a “huge negative” not just for Greece but for other heavily indebted peripheral economies, he said. “The possibility of sovereign default would be in the forefront of people’s minds, and they would be asking, ‘Who’s next?’” he said. The real risk is not the short-term financial market impact of a Greek default, said Willem Buiter, Citigroup’s Chief Economist. The European Central Bank could manage those events with existing tools.
“You can handle the financial crisis. You cannot handle, I think, the damage to the European integration process,” he told CNBC’s “Squawk on the Street.” “It would be the first time since 1951 that a treaty-based integration process would have been reversed. It would be a disaster.”

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Photo credit: Ulrich Baumgarten | Getty Images by CNBC


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