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.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.