Euro officials talk ‘Grexit’ of Greece from euro
David Brancaccio: European leaders meeting into the wee hours of the morning Brussels, now say they will defer big decisions on Greece until their next meeting in June, the same month as Greece’s new general election. The leaders say they are committed to Greece staying with the euro, but talk of an exit is growing louder. Unfortunately, the term that’s beginning to gel for this is a clumsy one, Greece plus exit equals “Grexit.”
From London, Christopher Werth reports on possible costs.
Christopher Werth: There was a time when only analysts and pundits pondered the possibility of a Greek exit, but Marie Diron, an economist at Oxford Economics, says today, the word “Grexit” is even being bandied about by euro zone officials.
Marie Diron: Until recently really a Greek exit was officially unthinkable, and now we’re being told that governments need to prepare for it.
Officials among a group of euro zone finance ministers have advised euro zone members to draw up contingency plans for what’s being called an “amiable divorce” from Greece. Reuters reports there’s talk of the International Monetary Fund providing just over $60 billion dollars to provide a soft landing, but Nicholas Spiro of Spiro Sovereign Strategy in London says that amount could be just the beginning.
Nicholas Sprio: One can only imagine if you open up the Pandora’s box of a Greek exit how this would be seen as a dangerous template for the rest of the euro zone.
He says the overall costs could mount to well over $600 billion dollars, as Greece defaults on its remaining debts, and investors and depositors pull their money out of other troubled euro zone countries such as Spain and Italy.
In London, I’m Christopher Werth for Marketplace.
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