Greek Debt Crisis

Instability in Greece likely to continue

Julia Coronado Feb 13, 2012

Jeremy Hobson: Let’s bring in our regular Monday guest, Julia Coronado, chief economist with the investment bank BNP Paribas. She’s with us live. Good morning, Julia.

Julia Coronado: Good morning.

Hobson: First of all, who has more to lose here — the Greeks or the European nations like Germany, that are going to have to approve the bailout?

Coronado: That’s a terrific question. The Greeks are basically facing a tough road. It can either be stretched out over time with some help from the European nations, or they would have to make it all at once if they don’t get the funding — so they have a lot to lose.

But for Germans, if we worry about if Greece gets kicked out of the eurozone, then we worry about Portugal, then Spain, then Italy and we lose the stability they’ve worked so hard to get over the last few months. So both parties have a lot of lose here.

Hobson: And what about Greece — when do you think we can be at the point, if all goes as planned here, where a company decides: you know what? I want to locate in Athens and start hiring some people?

Coronado: Unfortunately, I think that’s going to be a matter of years, rather than months. Greece has, again, a lot of cuts to make, a lot of reforms to make. And it’s probably going to be looking at some economic instability and political instability for a while.

We can contrast that with Ireland, where they’ve made a lot of the cuts. Things have gone as scheduled, and actually private investors have started to come back. So one of the problems with Greece is their inability to get these things passed in a timely way.

Hobson: Julia Coronado, chief economist with the investment bank BNP Paribas, thanks as always.

Coronado: It’s a pleasure.

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