Europe Admits Greece Exit Preparation!

- Greece alone will not destroy the Eurozone. It is the contagion fear. If Greece leaves, why not Portugal, Ireland, Italy, Spain (PIIGS) …etc. There are some who say that departure of the weaker Southern Eurozone countries will actually benefit the Euro and the ECB will engage in massive QE to stabilize the market. They say it will lead even to a rally in the stock market and Euro. It may happen. But I doubt it will last. Greece will not be the last to depart the Eurozone. Ie. the Euro will collapse eventually.
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Europe admits Greece exit preparation!
By Philip Aldrick, http://www.telegraph.co.uk/
Brussels is preparing plans for Greece to quit the euro, a senior official has revealed, as analysts warned that the country’s exit would cost European taxpayers at least €225bn (£180bn).
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European Union trade commissioner Karel De Gucht said that both the European Commission and the European Central Bank (ECB) were working behind the scenes on contingency plans for a break-up.
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“Today there are in the European Central Bank, as well as in the Commission, services working on emergency scenarios if Greece shouldn’t make it. A Greek exit does not mean the end of the euro, as some claim,” he said.
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The first public declaration that preparations are in place came as economists at UBS said European taxpayers would have to swallow losses on Greece, whether or not it remains a member of the currency union.
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Under a best case scenario, which would see Greece remain inside the euro but its colossal €274bn of outstanding debt put on a more sustainable path, UBS said European taxpayers would have to write-off €60bn of the €182bn of rescue loans they have provided.
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If Greece was to leave the euro, however, the bill would jump to at least €225bn as the new currency would halve in value and €104bn of additional emergency funding by the ECB would be wiped out.
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