The economist credited with coining the term “Grexit” said Thursday it would be a disaster if Greece leaves the euro zone.
The real risk is not the short-term financial market impact of a Greek default, said Willem Buiter, Citigroup’s chief economist. The European Central Bank could manage those events with existing tools, including the activation of a “hyperactive” level of quantitative easing and purchases of sovereign bank debt on the primary market through the European Stability Mechanism.
“You can handle the financial crisis. You cannot handle, I think, the damage to the European integration process,” he told CNBC’s “Squawk on the Street.” “It would be the first time since 1951 that a treaty-based integration process would have been reversed. It would be a disaster.”