UK Research Center Tells Greece to Quit the Euro
Despite new austerity measures and a nearly trillion dollar eurozone rescue package, a UK research center is proclaiming that Greece’s days using the euro are numbered. The Centre for Economics and Business Research says it’s only a matter of time before Greece must abandon the euro and default on the roughly €300 billion it has racked up in debt.
From The Times:
“The Centre for Economics and Business Research (CEBR), a London-based consultancy, has warned Greek ministers they will be unable to escape their debt trap without devaluing their own currency to boost exports. The only way this can happen is if Greece returns to its own currency.
“Greek politicians have played down the prospect of abandoning the euro, which could lead to the break-up of the single currency…
“…Greece’s departure from the euro would prove disastrous for German and French banks, to which it owes billions of euros. McWilliams called the move ‘virtually inevitable’ and said other members may follow.”
The other euro members fingered are the usual suspects including Spain, Portugal, and Italy. However, if German and French banks are to wind up the biggest losers, by billions, it makes sense that those nations may fight this euro abandonment as vigorously as possible. We’ll see how they weigh the long term consequences of that strategy.
You can read more details in The Times’ coverage of Greece getting urged to give up the euro.