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Guardian: Greek Euro Exit Would Cost 1 Trillion Euro

Thursday’s front page of British daily The Guardian is impressive. A huge number of  zeros lined up next to each other. An impossible eye-exercise for those suffering of astigmatism! How does one trillion euro look like?

Cost of Greek Euro Exit Put at 1 Trillion

The British government is making urgent preparations to cope with the fallout of a possible Greek exit from the single currency, after the governor of the Bank of England, Sir Mervyn King, warned that Europe was “tearing itself apart”.

Reports from Athens that massive sums of money were being spirited out of the country intensified concern in London about the impact of a splintering of the eurozone on a UK economy that is stuck in double-dip recession. One estimate put the cost to the eurozone of Greece making a disorderly exit from the currency at $1tn, 5% of output.

In a speech in Manchester before flying to the United States for a summit of G8 leaders, the British prime minister, David Cameron, will say the eurozone “either has to make up or it is looking at a potential breakup”, adding that the choice for Europe’s leaders cannot be long delayed.

“Either Europe has a committed, stable, successful eurozone with an effective firewall, well capitalised and regulated banks, a system of fiscal burden sharing, and supportive monetary policy across the eurozone, or we are in uncharted territory which carries huge risks for everybody.

“Whichever path is chosen, I am prepared to do whatever is necessary to protect this country and secure our economy and financial system.”

Officials from the Bank, the Treasury and the Financial Services Authority are drawing up plans in the expectation that a Greek departure from monetary union – increasingly seen as inevitable by financial markets – could be as damaging to the global economy as the collapse of Lehman Brothers in September 2008.”

…and further reading The Guardian

PS As I keep counting the zeros with great effort,  and I start anew again and again due to my broken astigmatism eye-glasses, I wonder whether it would be better we stay in the euro. But without Merkel, Schaeuble, Barroso, van Rompuy & Co.

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3 comments

  1. KTG, I guess like most newspapers, you have to look at their aganda – The Guardian is heavily pro-EU, socialist. So, reading the link

    “One estimate put the cost to the eurozone of Greece making a disorderly exit from the currency at $1tn, 5% of output”.

    And that’s it ! One estimate – by whom ? – based on what assumptions ? Who knows, they’re not saying, and no link to the estimate. Basing a front page headline on that one, totally information free sentence, is serious shit journalism.

    • keeptalkinggreece

      …………….

      • And another thing. There is no use estimating the cost of Greek exit (not that they acually did give us a meaningful estimate)without also estimating the cost to the EZ of Greece staying in for comparison.

        That’s it – I’m going on holiday now.